Ibiza Centro
Ibiza Centro
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Introduction:
Introduction:
Ibiza centro was designed in 2005 as an urban planning for the regeneration of the town's center. Since the project involved many different actors as well as raising important infrastructures in the heart of the city and the rehousing of population, it had to face multiple technical and managerial challenges as well as heavy socio-political stressors. Given the great influence of these factors on any assumption regarding plots' availability deadlines, or assets construction and sale's prices and deadlines, it was necessary a decision support system able to inform decision-making despite the deep uncertainty all times surrounding the project.
Decision Support System:
In this study, we modeled and analyzed what would happen had the operation be developed today following 2005' scheme. By scheduling the planned actions, we reduced the maximum annual investment required and regulated the number of assets delivered per year in order to avoid saturation of the market, thus achieving improved operation's economic and financial resilience.
The tool combines the split of the operation's centerpiece into phases with automated scheduling to afford optimal planning alternatives, and evaluates how they behave in the face of the modelled uncertainties:
- Time when plots, due to delays in the closing of agreements with the land-owners, become available for the operation.
- Investment's costs and deadlines.
- Assets' price and time to market.
- Market's disturbances
Results:
Through a correct design and programming of stages and thanks to the selective introduction of delays between actions, it was possible to reduce the overlapping both at investing as in delivering assets to the market, thus avoiding inefficient usage of financial resources as well as market saturation. This, together with analyzing all relevant strategies' prices and deadlines uncertainties, helped us in improving the operation's resilience from a financial and economical standpoint.
Compared with the standard solution (centerpiece in 1 stage, early start), the selected strategy (centerpiece in 5 stages, selective delays) improves the operation's risk performance in the following objectives:
- NPV=60.27%
- Unlevered Yield=25.62%
- Investment=19.48%
- Payback time= 25.4%
On the other hand, the operation behaves worst in the deadline objectives, increasing the risk of overall delay by 0,55 years.
Conclusion:
By means of a correct operative strategy it is possible to distribute both the execution of investments and the delivery of assets to the market over time, thus avoiding an inefficient usage of financial resources or saturation of the market. This, together with analyzing all relevant strategies' prices and deadlines uncertainties, helped us in improving the operation's resilience from a financial and economical standpoint at the expense of a relatively low risk increasing of deadline-related objectives.
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