FEASIBILITY ANALYSIS : CASE STUDY OF UOB PLAZA

Abstract

Because property development is by its very nature uncertain, it involves an element of risk. The inevitable long gestation period of property development renders it vulnerable to changing market conditions, which are in turn fraught with uncertainty. It is therefore essential that the project development is thoroughly evaluated before commitments are made and while there is still a possibility of changing course - reducing cost or even abandoning the entire project. Most of the time developers embark on developments based on their intuition and market sentiments. As projects get increasingly complex and large in scale, the developments should not be based on the above approach for decision making. Hence, a feasibility analysis should be conducted to ensure that development decisions made are supported by reliable market studies and accurate assessment of the financial position as well as the risk profile of the investment.