Evaluating Financial Feasibility Studies Based on Real Estate Developers’ Requirements

Abstract

A financial feasibility study has been identified as a ‘critical success factor’ of construction projects that can cause these projects to fail, if not executed or communicated correctly. Yet, research indicates that the aforementioned feasibilities are not executed well, inconsistent, neglected, and problematic. They greatly lack best practice items. An audience analysis was conducted through semi-structured interviews with 23 real estate developers in the private sector. This analysis presented the developers’ needs and requirements for the documents. A total of 23 requirements were identified. From these requirements, an evaluation tool was created and 18 financial feasibility studies were evaluated. The average score of all 18 feasibilities is 62%. Three feasibilities achieved a below-average score in both categories. Six (33.33%) of the feasibilities managed to score above average in both categories, while the average of the respective categories are 68% and 50%. The data indicates that an audience analyses lacks in the industry, leading to poor communication that does not fulfil the needs of real estate developers.