SSUD71-108: Development & Investment - Finance and Taxation Assignment

Finance and Taxation Assignment:

Scenario 1 PD Company proposes the development of a retail shopping centre of 2,800sqm located at the corner of Cotlew and Wardoo Streets, Ashmore on the Gold Coast. The proposed development will have a total of 1,400sqm of space and seven tenancies. The development of this brownfield site is based on a market study, which indicates demand for a fast-food outlet, a drive-through liquor facility and a convenience store in this precinct. The project details are as follows: 1. Development approval: approx. 3 months. Professional costs for the approval application are approximately $180,000 2. Estimated construction cost $2,540,000. Tenants provide their fit-outs. 3. Consultants $220,000 4. Land cost $1,290,000 5. Professional fees $240,000 6. Risk-weighted budget contingency $250,000.

Question: Prepare a detailed term sheet for the transaction taking into account current market conditions.