How to Effectively Assess Project Development Opportunity

Key Criteria for Assessing Project Development Opportunities.

Addressing these four key issues when looking to buy a development site can help developers retain focus in any climate.

Certainly, for many the allure of property developing will always call to them. with its high risk, high reward stakes and the ability to create lasting legacies that can inspire and shape our surrounds and the way we live, function and relate to built form. Property development is without doubt a wild ride!

The tantalising offer of great rewards that accompanies successful projects drives most, whilst balancing on a knife’s edge between the dichotomy of resounding project success or failure. One thing’s for certain, developing is not for the meek, impatient, inexperienced or unfocussed.

Breaking down the property development process into Four Key Pillars allows for clear thinking and planning. We can look at development as a continuum, with many aspects in play simultaneously. Managing the steps along the property development journey may feel at times like walking a tightrope whilst juggling chainsaws, over croc infested waters.

The four major pillars or aspects to property development are as follows; Site Assessment, Project Feasibility, Financing Considerations and Marketing and Sales. Within each foundation block or pillar are a myriad of concerns to take into account. We may summarise the issues that developers are tasked with in the following way:

SITE ASSESSMENT
– Open Space Requirements
-Zoning
-Environmental Assessment
-Municipal Authority Costs
-Demolition
-Existing Conditions
-Developement Costs
– Quality of Existing Tenant

PROJECT FEASIBILITY
– Ensure Accurate Costing are made
– Ensure Accurate Yield Analysis is made
– Aquire Accurate Costings for Design and Planning, Demolition and Clean Up and Construction

MARKETING AND SALES
-Accurate Project Sales and Figures Supported by Accurate Forecast Data
– Ensure Projected Sales Revenue Underpins Feasibility
– Suburb Location Insights
– Zoning / Gentrification
– Spotting Market Buyer Trends

FINANCING CONSIDERATIONS
– Debt to Equity Ratio
– Private Capital Available
– Pre-Development Funding
– Mezzanine Funding Requirements
– Senior Debt Funding
– Bank Vs Private Funding

Property development is a HIGH STAKES, intricate process that requires expert knowledge, that is grounded in proven experience. Each stage is reliant and subject to the previous. Any miscalculations made along the way may result in a poor or failed project outcome. It is not sufficient to engage an entourage of isolated consultants and believe the project outcome will be maximised or at all successful. This is not a forgiving space for cheque book developers with twenty-twenty hindsight looking for a magic wand to fix mistakes made along the project development process.

Along with analysis, purchase and construct, the plethora of reporting, checks, balances and approvals from government and funding bodies requires the skill set of a skilled and proven Development and Project Manager.


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