Gross Realisation Value (GRV)

Gross realisation value (GRV) refers to the estimated total sale value of a development project upon its completion and sale in the open market.

Importance of gross realisation value

GRV is a crucial metric in property development, helping developers, investors, and lenders assess the potential profitability of a project. It aids in determining financial viability, securing financing, and calculating expected profit margins by comparing GRV against total development costs.

Calculating gross realisation value

To calculate GRV, estimate the market value of each unit within the development based on current market conditions and recent sales of similar properties in the area. Summing these individual values provides the project's total GRV.

Example:

If a developer plans to construct 10 residential units, each expected to sell for $800,000 upon completion, the GRV would be:

10 units × $800,000 = $8,000,000

Accurately estimating gross realisation value is essential for making informed decisions in property development projects.

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DISCLAIMER: The information provided on this page is for general informational and educational purposes only and is never intended as financial advice. While we strive to ensure that the content is accurate and up-to-date, it may not reflect the most current legal or financial developments. Always consult with a qualified financial advisor or professional before making any financial decisions. Use the information at your own risk.

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