9Developing New Buildings

9.1 The development process

Property development is a high‐risk, complex activity that is directly influenced by global, national and local economics. It involves changing or intensifying the use of land. It also involves tying up large sums of money in a lengthy production process.

The development process can be considered in three main stages and a number of sub‐stages.

Stage 1 – Feasibility

A site is considered appropriate for development or redevelopment, or a suitable site is sought. Reasons may be: demand for the development or in anticipation of enhanced value of the site due to changing economic, social, technical or other circumstances. Market research will take place at this stage and the potential for obtaining any necessary planning consent will be investigated.

Evaluation

The results of the feasibility study will guide development decision making throughout the process. The evaluation includes the financial appraisal of the development proposal, which must establish the value of the site and ensure that development costs are reasonable. In the private sector, it indicates the anticipated level of profit. In the public sector and non‐profit organisations, it sets out to ascertain whether costs can be recovered. The developers’ professional team should be involved at this stage.