Build to Rent Viability Assumptions

The assumptions outlined in Figure 4.5 below can therefore be used for large scale BTR development in the city centre. Whilst a maximum of 10% developer return may be accepted, sensitivity analysis undertaken to inform this assumption has shown even lower returns may be viable. Closely aligned to a developer's consideration of return is the issue of funding and, in particular, funding risk. The bespoke financing model recognised by the Council, includes premium rents, based on Ulster University rental value estimates and a set of industry standard cost allowances. Accordingly, rental yields of 5% are considered appropriate for viability testing purposes, although we acknowledge that specific scheme yields may vary from this. In addition to this, the Council also recognise that the cost of rates (less the 10% landlords discount) is a unique cost in a NI context, which should be netted off the gross rents.