Valuation of Worth for Refurbishment Project of Residential Properties. A Case Study in Bari

In the last decade the application of risk analysis to property investment has been considered more and more important (Norman and Flanagan, 1993). The work is focused on a risk analysis in order to highlight how technological-constructive and typological standards may affect the financial result. A model has been developed in order to analyse the financial results of several hypotheses of real estate management: no maintenance operations, some maintenance operations, typological refurbishment, a different placement of the property on the market, and the possibility of tenancy variations in the market of rents. The feasibility has been developed in 6 fundamental parts: Analysis of the present state, Analysis of legal restraints, Analysis of market, Identification of possible alternatives, Technical proposal, Economic-financial assessment. The case study is a refurbishment of several residential buildings belonging to IACP, an Italian public company, in Bari (South of Italy) also called. The samples of residential building have many differences including location, age, constructive technology, housing typology and maintenance condition, which are essential elements in the creation of a management model. In the feasibility analysis the relationship between NPV (Net Present Value), lRR (Internal Rate of Return) and PBP (Pay Back Period) and a different mix of typological solutions has been examined in order to assess the investment risk.