Financial Modeling

We believe that all investment decisions should start with a thorough understanding of the potential financial outcomes. That's why we use industry-specific, detailed financial modeling to assess the bankability of investment opportunities.

Feasibility Analysis

Our feasibility analysis assesses the financial returns of a variety of projects, such as:

  • acquisitions of new sites
  • redevelopment of existing facilities
  • mergers with other organisations
  • sourcing project finance (equity and/or debt)
  • applications for government funding

Our modeling captures assumptions over the entire project life cycle (development, operations, terminal value), including:

  • Capital Expenditure (e.g. land, professional fees, construction, contingencies)
  • Funding Requirements (e.g. debt/equity levels, peak exposures, payback durations)
  • Turnover Rates for retirement villages/aged care facitilities
  • Deferred Management Fee (DMF) (or departure fee) structures for villages
  • Operating Budgets (e.g. major refurbishments, wages)

Our analysis is presented in transparent report format, and includes:

  • Development Profit
  • Net Present Values (NPVs) of project cash flows
  • Internal Rates of Return (IRRs) for project, debt and equity streams
  • Graphical Representation of project cash flows
Cash Flow Graph (jagged)

Sensitivity Analysis

Our sensitivity analysis identifies key project drivers and risk factors, and is used to assess base-, worst-, and best-case scenarios. This provides stakeholders with a complete picture of their investment opportunities, and helps avoid (or prepare for) any potential shortfalls in the future.

Typical sensitivities include:

  • construction costs
  • development durations
  • sales values
  • take-up rates
  • length of stay of residents

Iterations

Most projects are not perfect from the beginning. Most of the time, a series of changes need to be made to ensure that both financial and social objectives are achieved. Changes might include:

  • restructuring of capital resources (debt/equity)
  • restaging a development
  • reconfiguration of initial designs
  • reviewing product mix (e.g. bedroom configuration)

Once an initial feasibility analysis is complete, it is possible to explore various options that may better meet the objectives of stakeholders, whether it is increased returns or high levels of social benefits (e.g. affordable housing).

Independent Validation

Our analysis is based purely on the underlying assumptions; not on the desired returns. Many of our clients engage us to assess the validity of their own 'in-house' modeling, which provides greater certainty regarding the projected outcomes.