# Allora Feasibility Model

> Instant real-estate development appraisal for Cyprus by Allora Capital (allora.capital). Enter a plot and a product positioning; the model returns NPV, IRR, net-of-tax profit, peak funding, breakeven and a monthly cashflow.

## How to use programmatically
GET /api/appraise?plot_size=1500&plot_cost=2000000&density_pct=90&parceled=true&project_type=suburban_apartments&price_category=mid
project_type: city_apartments, suburban_apartments, suburban_housing
price_category: budget, mid, upscale, luxury — or 'custom' with sale_price_per_sqm, construction_cost_per_sqm, velocity_units_per_month
OpenAPI schema: /openapi.json

## Embedded assumptions
- Capacity chain: The building coefficient sets the legal density area. Apartments lose 7% of that density to circulation before it becomes internal area; houses lose none. Covered verandas — which don't count against the coefficient — then add 25% on apartments and 20% on houses, giving the net sellable area (NSA) that determines the unit count and revenue. Construction is priced on gross floor area (GFA): NSA equals GFA for houses, while apartments build shared cores and corridors, so GFA = NSA ÷ 83%.
- Housing feasibility: minimum 330 m² of net land per house. Each house needs land: net land divided by the number of houses must leave at least ~330 m² per house for the dwelling, setbacks, parking and a usable garden. Below that, the scheme isn't feasible for the designated house size — reduce the unit count, shrink the product, or switch typology.
- Road deduction: 10% on non-parcelled plots plus statutory stepped public green. When a plot is not yet parcelled, 10% of gross area is deducted for public roads (plus the statutory stepped public-green deduction). This reflects the typical Cyprus planning outcome; parcelled plots carry no deductions.
- Unit sizes: City-centre apartments ~80 m²; Suburban apartments ~112 m²; Suburban housing ~190 m²
- Price/cost benchmarks (EUR per m²): Budget: sale 3,200, build 1,500; Mid-market: sale 4,500, build 1,800; Upscale: sale 6,000, build 2,200; Luxury: sale 8,500, build 2,800. Benchmarks are apartment prices per m² of sellable area; housing sells at 80% of the bracket's rate (larger homes trade at a lower €/m²). Custom prices are used exactly as entered.
- Sales velocity (units/month): Budget 2.0; Mid-market 1.0; Upscale 0.5; Luxury 0.3
- The sell-out period is not an input: it is derived from the project's unit count and the average sales velocity of its price category. Housing sells at half the apartment pace in every bracket — a higher ticket and thinner buyer pool. Slower categories automatically produce longer sell-outs, later cash and lower NPV.
- Absorption curve: Sales don't run at full speed from day one. The model uses an absorption curve: the launch starts at 40% of the category's velocity and ramps to full pace over the first 3 months (small schemes) or 6 months (larger ones) while marketing gains traction; the scheme then sells at full velocity until ~85% of stock is gone; the last 15% — the least attractive units — sell at half pace, often past completion at appreciated prices. Units are scheduled monthly, so a mid-year launch no longer compresses a year's quota into a few months.
- Timeline: Projects don't sell on day one. The land is acquired at model start (today); design and permitting then run 6 months for apartment schemes up to 12 units, and 12 months for larger schemes and all housing. Construction and off-plan sales start together when design concludes, and marketing begins within 3 months of project start to build the brand before launch.
- Construction period: Apartment projects and small housing schemes build out in 2 years. Suburban housing projects over 20 units run 3 years — phased infrastructure and multiple contractors stretch the programme.
- Permitting: Planning and building permit fees scale with the building: ~€7/m² GFA for the planning permit and ~€11/m² GFA for the building permit (calibrated to recent Allora projects). Small schemes file the planning permit ~3 months in and the building permit at month 6; larger schemes file at months 6 and 12 — so the building permit always lands as construction starts.
- Parcellation: non-parcelled plots build their ceded road+green at ~EUR 120/m2. A plot that isn't parcelled must build the public road and green space it cedes: the deducted area is constructed at ~€120/m² (roadworks, services, landscaping). These works land at the end of the project — the final months of construction, finishing at handover.
- Appreciation: Off-plan prices rise while the project is under construction — 10% p.a. for apartments, 5% p.a. for houses — then revert to a long-run 2% p.a. after completion. Revenue is realised at the appreciated price of each unit's sale month.
- Soft costs: Sales commission 5% of revenue; Sales management fee 1% of revenue; Marketing 1% of revenue; Design & engineering 5% of construction; Contingency 5% of construction; Project management 3% of construction
- Administrative costs: Running a development SPV isn't free: incorporation and acquisition legals plus a bank-compliance commission on the land transfer at setup; then audit, accounting, corporate secretarial, tax compliance, registered office and bank fees every year (audit and accounting scale mildly with project size); and a final striking-off cost when the SPV closes. Typically ~€100k over a mid-size project's life.
- Taxes: 15% Cyprus CIT. Profits are taxed at Cyprus corporate income tax of 15%. Before tax, a Notional Interest Deduction (NID) of 8% on the equity invested (the project's peak funding) is deducted in profitable years, capped at 80% of that year's taxable profit — a Cyprus incentive that rewards equity-funded development. Losses carry forward, so early-year losses shelter later profits; tax is paid in two provisional installments (31 July and 31 December).

## Outputs
All headline outputs are net of tax. Exports: monthly cashflow (Excel) and a shareable PDF appraisal.