The Project Viability Index is a crucial metric used in UK property development finance to assess a development’s financial potential. It evaluates core elements such as total development costs, projected sales or rental income, and the feasibility of exit strategies, including refinance options. This index helps SME developers and financiers determine if a project is economically viable and capable of delivering the expected returns. By integrating risk factors and performance indicators, it provides a comprehensive measure of project feasibility, supporting sound decision-making in property investment and funding.
This sits beneath Refinance Viability, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Relet/Refinance Scenario Resilience Index, as both are closely related measures used to assess similar aspects of performance or risk. In funding terms, Project Viability Index is most commonly encountered in connection with Equal Share of Profits and Losses within the property development capital stack.
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