The Usages of Financial Feasibility Studies in Real Estate Development

Financial feasibility studies have been identified as a critical success factor for construction projects. Yet, these feasibility issues remain problematic in the industry and lack a holistic view of its functionality. The objectives of this study are to (i) determine the usages of feasibilities through a scoping review; (ii) expand on the existing literature through interviews with key stakeholders; (iii) develop a consolidated account of the usages per project phase; (iv) develop a comprehensive definition of feasibilities. A scoping review was followed by interviews with 23 developers and 23 quantity surveyors (QSs). The research highlights that financial feasibility studies are not merely a tool for determining project viability but also serve as a dynamic, evolving instrument throughout the entire project lifecycle. This research fills the gap by consolidating the various usages of feasibility studies across distinct phases of construction projects. The thematic analysis of stakeholder interviews reveals unique applications of QSs compared to developers. QSs leverage feasibility studies to secure work, provide advisory functions, and enhance their role in early project stages. Developers, on the other hand, use feasibility studies as strategic tools to address commercial challenges, assess project performance, and determine funding capacity. Lastly, a comprehensive definition of these feasibilities was developed. The study underscores the necessity for a more standardised and comprehensive approach to conducting financial feasibility studies to enhance their accuracy, reliability, and usability. Addressing inconsistencies, inaccuracies, and the range of usages could significantly improve investment decision-making, project success rates, and financial performance in the construction sector.