We believe that a construction project should be approached as a comprehensive, end-to-end service, from the moment the idea arises through to the purchase of the plot, the design, and the construction.
In phase zero, when the plot has not yet been purchased, it is important to carry out an analysis of the project’s economic feasibility, taking into account its constraints, as well as the state of the real estate and construction markets.
We start from the maximum available investment set by the developer or self-developer, and we prepare an economic feasibility study based on our clients’ needs and on up-to-date market prices, informed by the firm’s ongoing tendering activity and market reference prices.
The aim is to develop, together, a realistic investment forecast—whether the goal is to generate returns through renting or selling the asset, or to deliver a life project built to the highest standards of efficiency, sustainability, and health.
The feasibility study enables us to advise private clients and developers on investment decisions with full confidence in achieving success.
The feasibility study is closely linked to the land acquisition phase, as analysing the available investment and return options in advance allows us to narrow down as much as possible the price range of plots we should consider purchasing.
VALUATION OF REAL ESTATE TRANSACTIONS
Our team has more than 10 years of experience in valuing real estate transactions.
Whether the aim is to build a single-family home or to develop a residential building, the first step is to define clear investment objectives in order to anticipate the return in terms of square metres, energy efficiency, sustainability, and health.
In every project, we must strike a balance that achieves the best of each premise without exceeding the maximum investment budget, and this is where our studio adds significant value, thanks to our ongoing experience tendering projects of all sizes, which allows us to narrow down investment forecasts at any given time according to the state of the construction market.
Before starting a real estate transaction, we set a budget, a location, and an investment objective that will allow us to understand whether the project we are about to undertake is the right decision and, above all, whether it is feasible to carry it out with guarantees of success.
HOW TO CARRY OUT A FEASIBILITY STUDY FOR A CONSTRUCTION PROJECT?
At Slow Studio, we have been assessing the feasibility of our clients’ real estate transactions for more than 10 years, using our own methodology, which we constantly update in line with the real estate and construction markets.
SETTING THE MAXIMUM INVESTMENT FOR THE PURCHASE OF LAND
The first step is to set the maximum price for the land investment.
As a general rule, the value of the plot should be around 20–30% of the total investment.
Above this level, the project is very likely not to be a profitable investment, except in cases such as plots in prime locations or with minimal level differences relative to the surrounding area, which require less investment in site preparation and construction.
DEFINING AN UP-TO-DATE CONSTRUCTION BENCHMARK
Based on the defined land price, a benchmark of €/m2 built is established according to the client’s needs, bearing in mind that in all our projects this figure always refers to passive, net-zero energy construction with minimal impact on the environment and on people’s health, carried out with natural, healthy, minimally processed materials.
The base €/m2 benchmark is constantly updated and is based on the studio’s most recent tenders and construction market forecasts.
The impact of regulatory restrictions needed to mitigate the effects of climate change, as well as the depletion of our planet’s non-renewable resources, is driving an increase in the price of construction materials.
Materials are beginning to reflect the true cost of their extraction and processing—something that will become increasingly common as their impact is included in projects’ Life Cycle Assessment and with the expected introduction of emissions regulations in the coming years—and, at the same time, they are experiencing price increases due to supply and demand, especially for materials that are nearing peak production.
OBTAINING THE BASE CONSTRUCTION PRICE
Using the base construction benchmark and the projected square metres of the project, we obtain the base construction price, which may include additional structures with variable benchmarks, such as garages or swimming pools.
The base benchmark may also be increased if, based on the site study, we consider that site preparation could entail an additional cost over the total construction; this is the case for plots with steep slopes, where excavation, earth retention, or foundation costs may be high.
In addition, the benchmark may also vary depending on the location of the build; there are sites such as the Balearic Islands, where construction benchmarks are shaped by limited competition and by raw materials that largely come from mainland Spain and therefore include additional transport costs.
The base construction price is the amount paid to the contractor to carry out the physical execution of the works, including site preparation, the supply of materials, and labour.
A 10% VAT rate must be applied to this base construction price.
TAKING INTO ACCOUNT TAXES, BUILDING PERMITS, AND OTHER COSTS
Based on the base construction price, we calculate the total taxes, permits, and other costs associated with the project, such as land registry fees or the procedures required to legalise the home.
ASSESSING THE FEES OF ALL INVOLVED TECHNICAL PROFESSIONALS
Finally, we take into account all the technical professionals involved in delivering the project, including our work in the architectural design phase and site supervision, as well as the work of our collaborators, including: the quantity surveyor who will take part in the project as site execution director and health and safety coordinator; the geologist who carries out the subsurface study; the surveyor who prepares the study of the site’s different levels; and the various engineers who provide support in specific phases of the project, such as the energy efficiency engineer, the building services engineer, and the structural engineer. All of them help optimise each decision made throughout the project, enabling high efficiency and cost savings in both the structural system and the building services, during construction and throughout the building’s service life, including operation and maintenance.