Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

LECTURE 1: DEVELOPMENT PROCESS

It presents the initial ideas on how the whole process of real estate development take place.
by

on 28 August 2014

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of LECTURE 1: DEVELOPMENT PROCESS

WHY DO WE NEED THESE FINANCIAL TECHNIQUES?
property development is a costly investment
relatively high risk investment.
subject to a lot of factors and economic variables.

LECTURE 1: DEVELOPMENT PROCESS
DRIVERS OF R.E DEVELOPMENT
(1) the structure,
(2) the actors,
(3) the events,
(4) the site,

PROCESS & STAGES OF DEVELOPMENT
PROCESS (8 PROCESSES)
STAGES OF DEVELOPMENT
PRE-DEVELOPMENT STAGES
DEVELOPMENT STAGES
POST DEVELOPMENT STAGES
A. Pre development stage

Land cost
Conversion premiums
Subdivision cost
Submission cost for approval of building plans
Soil investigation
Environmental impact assessment (EIA)
Planning approval fees
Professional fees
Contribution to technical departments

LECTURE OUTCOME
At the of the session the course participants will understand about :
the various steps in a property development process
stages in property development
development cost items
property development appraisal
1. Initiation/ Site Identification
2. Evaluation
3. Acquisition
4. Design and costing
5. Permission/ approval
6. Commitment
7. Implementation/ construction
8. Let/ manage/ dispose

B. DEVELOPMENT STAGE
1.0 Site preparation cost
Site clearance
Cut and fill
Demolition
2.0 Infrastructure works
Road and drains
Electrical reticulation
Electrical substation
Water supply reticulation
Elevated water tank / reservoir
Sewerage reticulation
Oxidation ponds
Telephone cabling
Public halls
Religious place of worship

3.0 Building construction cost
4.0 Landscaping works
Turfing cost
Hardscape cost
Playground fittings
5.0 Professional fees
6.0 Cost of bridging finance
7.0 Marketing and promotional cost
8.0 Project management cost
9.0 Contingencies -
(a) An event that may occur but that is not likely or intended; a possibility. (b) A possibility that must be prepared for; a future emergency.

C. POST DEVELOPMENT STAGE
1.0 Property management cost
Maintenance cost to rectify building defects during the defect liability period

2.0 Outgoings
insurance
taxes
professional fees
security
services

DEVELOPMENT COST ITEMS
TECHNIQUES IN R.E DEVT APPRAISAL
Methods of Financial Evaluation
Residual method
Cashflow method
Simulation method

AIMS OF REAL ESTATE DEVELOPMENT
FINANCIAL RETURN-PROFIT
COMPETITION
SURVIVAL
INVESTMENT
WEALTH ACCUMULATION
SOCIAL AND ENVIRONMENTAL MISSION

STAGES OF DEVELOPMENT
4.1 Initiation/ Site Identification

Origin :-

4.1.1 Developer’s initiatives
4.1.2 Landowner initiatives
4.1.3 Government initiatives

4.2 Evaluation

Evaluation includes ; site investigation, market research, and the financial appraisal of the proposed development.

The purpose- the cost of the development is reasonable and the economic viability of the project can be attained.

4.2.1 Site investigation

site survey i.e. physical and boundary inspection and land surveying
ground investigation i.e. soil test and EIA
contamination i.e. pollution and toxic waste.
services i.e. the availability of public services and connections
legal investigation to verify legal conditions of site.
financial investigation to ensure the site is suitable for financing.

4.2.2 Feasibility Study

To determine whether a project is financially feasible,
to identify and recommend choices of development and
how the project should be implemented, priced and marketed

Covers five perspective :-

1. Site/ locational feasibility
2. Economic feasibility
3. Market feasibility
4. Design feasibility
5. Financial feasibility


4.3 Acquisition

May be undertaken using the following approaches :-

Private treaty
Formal tender
Public auction
Joint venture

4.4 Design and Costing

1. Architect to provide the architectural and working drawings

2. Engineers to provide the structural and mechanical and electrical drawings

3. Quantity surveyors to provide costings and bill of quantities

4. Town planners to provide the layout plan of the overall development.

5. Project manager to provide the management strategy, network analysis

4.5 Development Permission & Approval

Application and approval by Securities Commission

Application and approval for conversion and subdivision

Application and approval for development order and building plans

Application and approval for developer’s licence and advertising permit

Application and approval for bridging and end financing

4.6 Implementation and Construction

The second stage of development

Deals with the physical aspects of the development

Infrastructure and building construction.

4.6.1 The professional team

Architects
monitor and supervise the contractor to ensure the contractor keep to the design and specifications.

Engineers
monitor the structural, mechanical and electrical aspects of the construction

Quantity surveyors
monitor, supervise materials, quantities and costings in accordance to the building contract and to approve progress payments to contractors.

Project manager
ensure the contruction is done according to the scheduled plan.

Real estate agent
promote the development in order to capture the market share.

4.6.2 Stages of construction

Site preparation
Land surveying
Infrastructural works
Piling works
Foundation and sub structural works
Super structural works
Finishes and fittings
Services
External works

4.7 Sales and Promotion

an essential and integral part of the development process. The disposal whether through sale or letting

should be planned and thought out during the evaluation process and implemented.

based on the market research undertaken during the evaluation process

developers policy and strategy
to sell or to rent or both.
Full transcript