Navigating the property development world can feel like swimming in an alphabet soup. Let’s break down some of the most common acronyms across development, finance, construction, valuation, and legal contexts. Each acronym is explained in plain English so you can read reports and emails with confidence.
Development and Planning Acronyms
In the planning phase, you’ll encounter council regulations and processes. Here are key acronyms to know:
- DA (Development Application) – A formal application to seek approval for a proposed development or land use.
- LEP (Local Environmental Plan) – A council’s planning law that controls land use and development at the local level.
- DCP (Development Control Plan) – A detailed guideline prepared by councils to guide specific types of development or development in particular areas.
- RFI (Request for Information) – If your DA is missing details or council needs clarification, you might receive an RFI.
- EIS (Environmental Impact Statement) – A comprehensive report on how a proposed project could affect the environment.
- VPA (Voluntary Planning Agreement) – A legal agreement where a developer voluntarily provides extra contributions or community benefits in exchange for planning approval flexibility.
- DD (Due Diligence) – Investigative process to ascertain if a potential development site has issues that need to be resolved.
- GFA (Gross Floor Area) – The area of a building measured from the inside of the perimeter walls, not including patios, decks and car accommodation.
- FSR (Floor Space Ratio) – It’s calculated by dividing the GFA of a building by the total site area.
Finance and Investment Acronyms
Property development is capital-intensive. These finance terms help you understand the money side and feasibility of projects:
- LVR (Loan-to-Value Ratio) – The percentage of a property’s value being financed by a loan.
- IRR (Internal Rate of Return) – A metric showing the annualised percentage return a project is expected to generate over time.
- ROI (Return on Investment) – A simple measure of an investment’s overall performance as a percentage.
- ROC (Return on Cost) – A measurement of the profitability of a project being the profit expressed as a percentage of the total development costs.
- GRV (Gross Realisation Value) – The total estimated sale value of a completed development project.
- TDC (Total Development Cost) – The sum of all costs to complete the project from start to finish.
- JV (Joint Venture) – When two or more parties form a partnership to undertake a development together.
- IO (Interest Only) – Interest payable on a loan with no principal reduction.
- LOC (Line of Credit) – A loan attached to an asset that can be drawn in part or whole and repaid and redrawn at will.
Construction Acronyms
Once you’re under construction, different lingo takes over. Here are terms you’ll hear on the building site and in contracts:
- PC (Practical Completion) – The stage when a construction project is essentially finished and fit for its intended use.
- EOT (Extension of Time) – A contractual extension to the project timeline granted due to delays beyond the contractor’s control.
- RFT (Request for Tender) – A formal invitation to suppliers or contractors to submit a bid for a project.
- BOQ (Bill of Quantities) – An itemised list of all materials, parts, labour and their costs for a construction project.
- CoC or “C of C” (Certificate of Classification) – Issued by a private certifier stating the class of the building and that it is fit for habitation.
- CoO or “C of O” (Certificate of Occupancy) – Issued by a certifier or building surveyor stating that a building is suitable for occupation.
Valuation Acronyms
These acronyms relate to assessing a property’s worth or investment potential:
- CMA (Comparative Market Analysis) – A method to estimate a property’s value by comparing it to recent sale prices of similar properties in the area.
- Cap Rate (Capitalisation Rate) – A percentage that expresses the annual return from an income-producing property relative to its value.
Legal Acronyms
Property development involves navigating legal and regulatory matters. Here are some common acronyms on the legal side:
- CT (Certificate of Title) – The official record of property ownership.
- CGT (Capital Gains Tax) – A federal tax on the profit made from selling an asset, such as an investment property.
- PPOR (Principal Place of Residence) – Your main home – the property you live in and call your residence.
- BC (Body Corporate) – a group of people (owners) who collectively own and manage common areas within a property such as townhouses or apartments.