Tool T–03 / Available
Let the project tell you what the land is worth.
Work backward from completed value, costs, finance, and required return to a defensible residual land value and maximum bid.
Assumption set
Site & value
Gross floor area
7,000 m²
Saleable area
5,740 m²
Land / site m²
KES 94,616
Land / GFA m²
KES 27,033
Model checks
- — The asking price is above the risk-adjusted maximum bid.
Land acquisition view
Bid position
Theoretical residual land value
KES 189.2m
Risk-adjusted maximum bid
KES 170.3m
Asking price
KES 180.0m
Bid headroom
KES -9.7m
Land / GDV
17.8%
Residual waterfall
Sensitivity matrix
Selling price × construction cost.
Each cell shows theoretical residual land value before the bid buffer. The center cell is the current case.
| Cost / Price | -10% | -5% | 0% | +5% | +10% |
|---|---|---|---|---|---|
| -10% | KES 168.0m | KES 205.5m | KES 243.0m | KES 280.5m | KES 318.0m |
| -5% | KES 141.1m | KES 178.6m | KES 216.1m | KES 253.6m | KES 291.1m |
| 0% | KES 114.2m | KES 151.7m | KES 189.2m | KES 226.7m | KES 264.2m |
| +5% | KES 87.4m | KES 124.9m | KES 162.4m | KES 199.9m | KES 237.4m |
| +10% | KES 60.5m | KES 98.0m | KES 135.5m | KES 173.0m | KES 210.5m |
Method note
The model calculates the total cost the projected development value can support at the selected margin. It then deducts construction, fees, contingency, sales, infrastructure, finance, and land acquisition costs to solve for the land purchase price.
Finance is estimated using average debt outstanding across the selected programme. The risk-adjusted maximum bid applies a separate buffer to the theoretical residual and should not replace title, planning, market, technical, environmental, tax, or legal due diligence.
Questions / Method
Land price is an output, not an assumption.
What is residual land value?
Residual land value is the amount left for land after deducting development costs, finance, acquisition costs, and the developer's required profit from the completed project's expected value.
Why is a maximum bid lower than residual land value?
A theoretical residual uses known assumptions. A maximum bid can apply a further buffer for planning, title, ground conditions, market movement, cost escalation, and other findings that may emerge during due diligence.
Which assumptions have the greatest effect on land value?
Selling price, buildable and saleable area, construction cost, programme, finance, and target return typically have the strongest effect. Land value is the residual, so it absorbs changes elsewhere in the appraisal.