Module Overview :
Land valuation and financial feasibility analysis represent a critical intersection of real estate economics, project finance, development risk management, and investor decision-making. A land parcel’s worth is not only determined by its size or location but by a web of tangible and intangible variables such as accessibility, land use potential, title clarity, environmental constraints, and market demand. This module empowers to understand and apply professional valuation techniques and carry out financial assessments that determine whether a land investment is viable, profitable, and sustainable over time.
As a fundamental part of pre-acquisition due diligence, valuation and feasibility studies form the basis for informed negotiations, investor confidence, and lender security. Whether for residential estates, commercial complexes, agricultural plantations, or mixed-use smart cities, financial modeling and risk sensitivity are required for project approvals.
This module dives into the concepts, tools, standards, and models used to quantify land value, assess development costs, project returns, and mitigate financial risk. You will explore professional valuation methods, real-world case studies, and strategic decision-making frameworks to evaluate the economic logic of acquiring and developing land.
Key Learning Areas
1. Introduction to Land Valuation
Definition and significance of land valuation in property development
Factors affecting land value: location, use, accessibility, size, zoning, utilities, demand
Legal, environmental, and physical constraints affecting valuation
Valuation as a tool for negotiation, financing, insurance, and taxation
2. Principles of Valuation
Highest and Best Use (HBU) principle
Substitution, anticipation, competition, contribution
Market vs investment vs use value
Forced sale vs open market value vs insurance value
3. Valuation Methods and Approaches
Comparative/Market Approach:
Using recent transactions of similar properties
Adjustments for location, size, title, condition
Widely used for urban residential plots
Cost/Contractor’s Approach:
Valuing based on replacement or reproduction cost minus depreciation
Useful for public utilities, special-purpose land
Income Capitalization Approach:
Based on potential rental income
Capitalization rate and Net Operating Income (NOI)
Most useful for commercial land or leasehold investments
Residual Method:
Deducting development costs from projected sale value
Often used in feasibility studies for speculative developments
4. Valuation Standards and Professional Practice
International Valuation Standards (IVS)
Nigerian Institution of Estate Surveyors and Valuers (NIESV) guidelines
Role of registered valuers, RICS members, and land economists
Legal liabilities and ethics in valuation reporting
5. Development Costs Estimation
Land acquisition costs: purchase price, legal fees, title registration
Pre-development costs: surveys, planning approvals, EIA studies
Hard costs: construction materials, labor, site infrastructure
Soft costs: consultancy fees, marketing, administrative expenses
Contingencies and inflation adjustments
6. Financial Feasibility Analysis
Estimating cash flows: inflows and outflows
Discounted Cash Flow (DCF) Analysis
Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period
Sensitivity and scenario analysis: what-if modeling
Break Even analysis and Return on Investment (ROI)
7. Land Market Dynamics and Economic Indicators
Demand-supply trends in urban and rural land
Macroeconomic indicators: inflation, interest rates, currency stability
Sectoral impacts: industrial, residential, agricultural, logistics
Effects of government incentives and foreign investment
8. Land Price Mapping and Spatial Valuation Techniques
Use of GIS to visualize land values across districts
Spatial autocorrelation and location intelligence
Hedonic pricing models
Access to valuation maps from land registries or local councils
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