How do you work out PBSA cost per bed?
Cost per bed is total development cost divided by the number of beds. It lets a lender compare your scheme with others in the same city regardless of size. Build cost per bed moves with specification, height and room mix: studios cost more per bed than cluster flats because each has its own kitchen and bathroom, and tall buildings carry Building Safety Act costs that low-rise schemes avoid.
How is GDV set on a student scheme?
Gross development value for PBSA is usually the capitalised net operating income: rent per bed per week, times let weeks, times occupancy, less operating costs, divided by an exit yield. The valuer will test the rent against the local market and the yield against recent PBSA transactions. See how PBSA is valued.
| Line | How we calculate it |
|---|---|
| Gross income | Beds × weekly rent × let weeks × occupancy |
| Net operating income | Gross income × (1 − operating cost ratio) |
| GDV | Net operating income ÷ exit yield |
| Profit on cost | (GDV − total cost) ÷ total cost |
| Yield on cost | Net operating income ÷ total cost |
Questions
What operating cost ratio should I use for PBSA?
Operating costs, including management, utilities, maintenance and marketing, commonly absorb a significant share of gross income on PBSA. Use your operator's budget; the ratio varies with scheme size, room mix and whether utilities are included in rent.
Does this include finance costs?
Enter your estimate of finance costs as a percentage of build cost. A lender's appraisal will model interest on the actual drawdown profile.
Written and reviewed by Matt Lenzie, Founder and principal. Last reviewed .