Commercial GDV
Gross retail rent £32,000. Op-cost ratio 12 percent (service charge, insurance, voids). NOI £28,000. Capitalised at 6.5 percent net initial yield: £430,700 capital value.
Residential GDV
3 x 2-bed flats at £350,000 each = £1,050,000.
Residual ledger
Commercial GDV (NOI 28k / 6.5% yield) | £430,700 |
Residential GDV (3 x 350k) | £1,050,000 |
Total GDV | £1,480,700 |
Build cost (320 sqm x £2,550/sqm mixed) | (£816,000) |
Professional fees (12%) | (£97,920) |
Planning + s106 (no CIL on small mixed-use) | (£18,000) |
Contingency (10%) | (£93,192) |
Finance interest (10%, 16 months, 50% avg) | (£68,275) |
Subtotal costs | (£1,093,387) |
Target profit (22% PoC) | (£240,545) |
Residual before SDLT gross-up | £146,768 |
SDLT non-residential 2% over 150k threshold (no surcharge) | |
Max land bid | £143,890 |
| Verdict | APPROVED (modest land bid; depends on owner-vendor appetite) |
Why mixed-use SDLT helps
Land with a genuine mixed-use at completion is non-residential SDLT: top rate 5 percent versus residential 5 percent surcharge ladder. On a 144k land bid the SDLT saving versus pure-residential is roughly 4 to 5k. Marginal but real.