Development Margin on Value measures the anticipated profit of a property development project as a percentage of the Gross Development Value (GDV)—the estimated market value of the completed development. Calculated by dividing the projected profit by the GDV and multiplying by 100, this margin helps UK property developers and financiers gauge profitability relative to the final sale value. It complements metrics like Development Margin on Cost, providing a clearer picture of returns, particularly where market conditions might shift before project completion. This measure is crucial for aligning development finance decisions with investor expectations and exit strategies.
This sits beneath Project-Level Profitability, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Discounted Land Residual, as both are closely related measures used to assess similar aspects of performance or risk.
View glossary entry