What Does A Construction Developer Do?

What Does A Construction Developer Do
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  1. Close, A developer constructs, redevelops or refurbishes buildings in order to make a profit,
  2. They are not the same as a property investors, who purchase completed buildings and sell them or rent them for profit, however, there is clearly considerable overlap.
  3. Smaller developers will generally sell developments once they are completed (trader developers ), whilst larger developers may be able to retain developments, building up large portfolios of property, in effect acting as a property investor (investor developers ).

A developer is distinguished from a contractor in that a contractor is appointed by a client (who may be a developer ) to carry out construction works, Contractors profit from the process of carrying out the works, not from the property itself. Developers may undertake construction themselves (for example, housebuilders ) or may appoint contractors to carry out the works,

Developers may fund development directly themselves, or seek investors. ‘ Development finance ‘ may be sought to cover the immediate costs of completing a development, whilst ‘ funding ‘ can be sought to cover the ongoing cost of holding a completed development, Developers may also seek ‘forward funding ‘ where a funder agrees to purchase the completed development,

Funding is largely provided by financial institutions or by banks. Developers may specialise in a particular area or a particular type of development, or may spread their risk by operating across a number of different areas and building types, Development may be speculative, or may be undertaken for a specific occupant,

The key phase in property development is deciding the nature of the development to be undertaken and whether or not to proceed with the development, These decisions are based on an evaluation of the market, and financial appraisal of the proposed development, including the likely constraints, risks and profit,

The development process can be summarised as:

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Initiation and evaluation, Land and property acquisition, Design and permissions, Construction, Management or disposal,

Development is a very complex process. Development evaluation requires assessment of a great number of criteria, funding can be difficult to secure, purchases and sales can take considerable time, and developments can require a great deal of management, As a result, developers require a great deal of expert knowledge in subjects such as:

Property and land valuation, Building pathology, Investment appraisal, Funding mechanisms. Property law and planning, Design and construction, Project management Estate management, Accounting,

The decision to invest in property is taken within the wider context of the global investment market, and an investor may include property as a part of a wider investment portfolio, However, unlike many other investments, property involves long-term commitment to unique, large, high- value assets, that can be created from scratch or can be improved to increase their value, and that require ongoing investment for management and maintenance,

Depending on the condition of the global investment market, property can be seen either as a safe haven, or can seem too expensive for the risk profile ; illiquid, inflexible and too long term compared to higher-returning assets, NB: Private Finance Initiatives ( PFI ) are one of the three procurement routes preferred by the government (the other two being prime contracting (or prime-type contracting ) and design and build ).

On PFI projects, a single integrated supply team is appointed with design, construction and facilities management expertise to design and build a development and then to operate it for a period of time. A special purpose vehicle (SPV), of which the integrated supply team is a part, finances the project and leases it to the government for an agreed period (perhaps 30 years) after which the development reverts to government ownership,

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Development appraisal, Development manager, Feasibility studies for construction projects, Funding options, Funding prospectus, Housebuilder, Investment property, Investment Property Databank (IPD), Land acquisition, Land value, Property development finance, PFI, Real estate investment trust, Residual valuation of land, Site appraisal, Site selection and acquisition, Site surveys, Speculative construction, Technical due diligence, Types of development,

What is a construction developer called?

Also known as a real estate or property developer, a construction developer may be an individual or a company. These professionals help procure land, finance projects and oversee a range of tasks related to transforming a plot of land into a property available for purchase. What does a construction developer do?

What is the role of a developer in a project?

Assembling a Team – The logistics of running construction projects is complex and one of the key objectives for a developer is the appointment of a professional team to undertake the design and construction. Though some development companies will have all the resources within their establishment, it’s far more common to appoint consultants with specific experience in the nature of the project they are engaged in.

What are a construction developer’s obligations?

Construction developers can be just project owners – or both the owner and contractor of a development project. In either capacity, a developer has certain obligations that need to be spelled out clearly in the contract documents, If this is done, the probability of a successful completion of the project is enhanced. If the initial step is omitted, the chances of delay and conflict are increased.

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What makes a good construction developer?

Financing and Project Timing – Developers are often the main financiers of construction projects. Many developers will have served apprenticeships in construction trades and will have a clear understanding of building design and construction related issues.