|New commercial property developments today|
Vacant commercial land will be a source of opportunity at some stage when property development becomes financially viable and feasible. It is a matter of cost verses return. Commercial and Retail Property Agents can do well if they incorporate developments into their business and prospecting strategy.
New Property Developments are Possible
Property developers will always look at developing a new property providing the requirement is there for future tenant occupancy, and that the land can be purchased at a price where the added costs of construction will still provide a reasonable profit or return.
This then says that the commercial real estate executive should be on the lookout for quality commercial property locally. Here are some rules to help the process:
- Identify all vacant parcels of land throughout the local region. Some of those land parcels may be allocated for future development and not yet categorized or zoned for development. They are however a medium term project to keep an eye on.
- There will also be some parcels of land ready for development currently that are not correctly priced for a developer involvement now. Over time the property owner can be conditioned to the realistic levels of pricing required to make the future project work for a developer. Property owners holding out for a high price usually wait a very long time and compromised in the end to a market price.
- Talk to the local property developers to understand the margins that they require for a suitable new project. There will also be local council costs associated with approvals and establishing the property for new development. The planning officers at the local council can brief you accordingly. Architects and engineers can help you with estimates on the head works associated with new property developments.
- The construction costs for new buildings in today's market can be categorized into property types and or locations. Talk to some local quantity surveyors to get an estimate of construction costs applicable to different building types. The different building types and the size of buildings will have relevance to cost estimates. Quantity surveyors will have a good idea of those costs in today's terms. Generally speaking, and at the lower end of the development and construction scale, Industrial property is much more economical to develop. Office property will be more expensive and Retail property will be at the high end of the cost scale based on the levels of finishes and complexities of retail construction.
- Check out redundant properties in the local area that have reached the end of their relevant lifecycle. They are likely to be suitable for redevelopment or demolition and new construction. There is always a timing issue associated with these projects given the changes to prices and the pressures of supply and demand in the local property market. That's where the specialist commercial real estate agent can tap into the opportunity and match the needs of all parties concerned. Timing is everything.
- Work with all large local businesses for design construct opportunity. Some the larger local businesses will consider constructing their own premises elsewhere in the local area. It is much more feasible and economic for them to locate into an adjacent or nearby new property development than it is to relocate out of the region. Most of their customers are likely to come from the local area and on that basis a local property development is quite attractive.
- Review the plans of developments under consideration locally. You can do this through the planning approvals process and the meeting minutes of the planning committee at the local council. Each month spend some time at the offices of the local planning approvals board to understand the new projects that are under consideration for approval. It is quite likely that details of the developments will be available for public scrutiny on commonly available meeting minutes.
- Get copies of the local planning regulations and maps that apply in your region. When it comes to any vacant property or redevelopment of the local property you will need to understand all of these plans and regulations intimately.
So there will always be an opportunity for new property developments to occur. It is simply a matter of c commercial and retail property agents identifying the developers who are prepared to act, finding the tenants who are prepared to occupy, or finding of the property owners who are prepared to purchase the finished product. It is then a matter of negotiation to get the costs for the parties in balance to a feasible and viable project.
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