Forecasting value in building projects

No abstract in thesis. Extract from conclusions: It is difficult to make a reliable forecast of the value of a commercial development at its outset when an offer is being formulated for a site and before design had started, and that the difficulty is compounded when there are options available to the developer as to the type of development, in which case, it becomes necessary to forecast the costs and values of each of those options in order that the most favourable balance between cost and value can form the basis for the offer. Value forecasts at this point do not have the same degree of reliability as cost forecasts, and it was suggested that the reason for this was the absence of formal value data collection routines and the means of manipulating the data for forecasting purposes. The study shows that, with no specialist knowledge of valuation processes or of the hotel domain in which the study was conducted, and with no knowledge of the physical attributes of the hotels being valued apart from brief verbal descriptions and a photograph of each, it was nonetheless possible to forecast their values on the basis of only two or three factors (five in one instance) with reliability closely approaching that achieved by experts working in more extensively researched and more homogeneous domains and with the benefit of complete knowledge of the projects they were valuing. This suggests that the problem set out in Chapter 1 Introduction could be addressed by the methods employed in the study, namely by collecting data from completed projects, using regression analysis and neural networks to analyse the data, identifying the factors most influencing value, measuring them, and producing equations that can be used for forecasting future values based on those factors. In addition to assisting early decision-making, the resolution of the problem will also enable the establishment of reliable value targets towards which, by value management, subsequent design may be directed, thus improving the prospect of value for money from the completed development.