Bespoke Financial Model for an Office Redevelopment Options Appraisal
31ten was engaged to support Kingston Council on its Business Case for an office redevelopment programme. Its existing office portfolio required significant investment to bring it up to modern-day office working standards, as well as there being scope for operational efficiencies due to some buildings being underutilised and/or energy inefficient.
31ten was asked to develop a bespoke financial model that could compare the options in terms of upfront investment required and impact on both the revenue and capital account (affordability). This model enabled Kingston to gain a clear understanding of the merits of the options, as well as easily feed into its business case.
The Role
As part of the role of building the bespoke financial model, the 31ten team initially interrogated the financial and practical information for each of the options, challenging assumptions where appropriate. Following the information review 31ten built out the model using an iterative approach. The key to the success of this exercise was ensuring a flexible model with a proportionate level of detail to the available information.
The team adopted a collaborative working approach with Kingston Council, taking advantage of live documents and progress meetings, where queries could be addressed in a timely manner. A good example of this was ensuring time for conversations with Kingston’s finance team to ensure it was comfortable with the approach to key assumptions such as borrowing costs, inflation, discounting, and Minimum Revenue Provision (‘MRP’).
The team presented findings to Council members and officers, providing a clear insight into the financial implications of each option. In light of these findings, 31ten was engaged to model two further scenarios. Following the final iteration of the model, the 31ten team wrote up the findings as part of the Economic and Financial Case, outlining clearly the methodology adopted to model the options and highlighting the key findings for decision-makers.
Key Outcomes
- A bespoke financial model that met the requirements of the project team;
- Dashboards that provided clear Economic and Financial Case outputs at a glance;
- Results added to the Economic and Financial Case of the Business Case.
