A development under way is already partly in your standing NOI. Credit it with the full completed value and you double-count. The analyst's move is to add only the incremental margin the remaining spend creates — discounted hard for the years and the construction risk before it earns.
Alstria's two identified projects — the Ohnsorg Theater and the Alte Post JV — are existing buildings being redeveloped. Their current income already sits inside the €89m stabilised NOI you capitalised in SM2. So if you now add their full completed value on top, you've counted the bricks twice. The fix: add only the development margin — the value the remaining build spend creates, over and above what's already in the standing portfolio.
| Identified pipeline | Ohnsorg Theater | Alte Post (JV) |
|---|---|---|
| Area (m²) | 3,263 | 6,600 |
| Stabilised NOI on completion (€m) | 5.58 | 2.05 |
| Exit yield | 5.43% | 5.43% |
| Ownership | 100% | 50% JV |
All figures are present values, discounting the staged build at a 12% development rate (well above the standing-asset cap rate — construction carries more risk) over an average ~2 years to completion. Compute the development NAV, then take off the capitalised management fee to get the contribution.
| Future GAV created by remaining spend (PV @ 12%) | 77.2 |
| Less: future build cost (PV @ 12%) | −53.8 |
| = Development NAV (€m) | |
| Less: capitalised management expense (PV) | −1.7 |
| = Contribution to NAV (€m) | — |