For the last several decades, the real estate development industry globally has continued to face rapidly increasing levels of complexity. The development project lifecycle involves many stages that are often subject to numerous pressures and risks. Property developers around the world are continually planning for and responding to a range of local, regional and even international market forces and dynamics including changing government policy, environmental regulation, micro and macro-economic factors, changes in public infrastructure and transportation, changing tenant and resident use patterns, fluctuating land prices and costs of construction materials, new project planning and building technologies, immigration and demographics, and many more.
Being able to interpret, anticipate and respond to market forces has always been a key part of what makes a successful developer. Being future-ready is more than just seeing the market — it’s about being able to identify and react to changing conditions and trends to ensure development strategies are optimized and projects remain profitable. A recent report published by Altua Group, based on a global survey of property development leaders, highlights these market forces, challenges, risks and opportunities to help provide an overall view of the state of change impacting the property development industry globally. What’s clear from the survey results, is that despite a wide range of economic, financial, political, demographic and technology-related dynamics, there is a significant portion of the industry that is proactively anticipating and responding to an array of fast-changing industry pressures that pose potential business threats. Yet, how developers are planning or actively responding to these challenges differs widely and is somewhat polarized, and it’s not necessarily based purely on pan-regional dynamics. There also exists critical gaps around performance management and efficiencies as well as a substantial degree of uncertainty among industry leaders about several emerging and potentially highly disruptive technologies.
FIVE THEMES EMERGED FROM THE FINDINGS IN THE SURVEY:
1. Powerful market forces are bringing change that did not exist a few years ago or have evolved substantially
2. How the development industry responds to changing market forces appears to be polarized
3. Developers have uncertainty around emerging technologies and their potential impact
4. Better benchmarking will help developers track improvements and performance
5. The use of alternative financing options has become more prevalent globally