Change · Connect · Return

One assumption, the whole case: tracing a utility diversion to IRR

How a single late diversion moves start on site, prelims, sales and peak equity.

Concrete frame of an apartment building under construction, wrapped in scaffolding

A utility diversion rarely looks like an investment question. It sits in the enabling works package, owned by a statutory undertaker, with a programme the developer does not control.

Yet if the diversion must complete before work can start, it sits on the critical path. Start on site moves. Prelims run for longer. The first sales arrive later, and the peak equity requirement rises because cost is incurred before revenue returns.

The appraisal will usually show a build cost and a sales period. It will not always show the link between them. That link is where the return is decided.

The question for an investment committee is not whether the diversion is priced. It is whether the programme, the cash flow and the return reflect it.

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