Gross Development Value (GDV)
GDV stands for Gross Development Value. It is the estimated final open-market value of a property or development project once all planned construction or refurbishment works are fully complete.
Gross Development Value (GDV) is the single most important metric in any property development project. It represents the total expected revenue from the sale of the finished units on the open market, assuming the project is completed to a high standard.
Development lenders base their entire funding structure on the GDV. A typical development loan might be capped at 60% to 65% of the GDV (known as LTGDV - Loan to Gross Development Value). The lender will appoint an independent RICS surveyor to verify the developer's projected GDV before agreeing to fund the deal.
Residual Valuation
Developers use the GDV in a 'Residual Valuation' to determine how much they can pay for a piece of land. The formula is essentially: GDV - (Construction Costs + Finance Costs + Required Profit) = Residual Land Value.