What is Real Estate Development? Flashcards
What are the primary steps in the real estate development process?
- invention of the project
- planning
- financing
- realization
- operation
What are the tasks of the developer in RED?
- benefit optimization for: tenants, planners, investors, and the public
- clear role allocation
- tenant mix optimization vs. investment costs
- risk consideration (real estate cycles, vacancies, external influences)
- selection of appropriate organizational forms
What are the developers benefits to tenants/users?
- experience
- research
- analysis
- mindset
- foresight of market needs
- development of products tailored to market demands
- complex development process that would overwhelm user
What are the developers benefits to investors?
- sustainable value creation through creative strategies
- long-term planning
- yield maximization
- positioning and marketing expertise
- budgeting and scheduling
What are the types of investors in RED?
- by activity: active or passive
- by ownership: institutional, fund, private
- by origin: Swiss or foreign
- by strategy: buy and sell vs. buy and hold
What is gross yield and how is it calculated?
planned rental income / total investment
example: CHF 32.5 million rental income capitalised with 6.5% = CHF 500 million total investment
(=> 32.5 / 0.065 = 500)
What are the developers benefits to architects/planners?
- initiation of construction projects -> job creation
- acquisition of investors for project
- definition of program for competitions and study contracts
- promotion of high-quality architecture
- leadership of planning process
- budgeting and scheduling
What are the developers benefits to the general public?
- sustainable investments (ecological, social, economic)
- foresight of future social developments
- initialization of high quality planning
- solving complex urban planning tasks
- cooperation with authorities, organizations and interest groups
What is the hierarchy of the planning process?
- regional planning => canton (federation)
- ESP (development priority planning) => region/district, organizations, interest groups
- zoning, land use and plan => canton/region, neighbors, NGOs
- permit process => local community, neighbors, NGOs
How has Switzerland’s population evolved, and what are the main trends?
- growth due to immigration
- decline in peripheral cantons due to emigration to metropolitan areas
- strongest growth in the outer agglomeration belt, lesser growth in suburbs, and slight decline in inner cities
What are the current housing and mobility trends in Switzerland?
- rural depopulation and return to cities
- concentration along suburban train corridors
- decreasing attractiveness of peripheral locations without excellent public transport
- cocooning (closing up in little groups)
What are the key strategies for future development in Switzerland?
- upgrading inner cities
- suburban densification with functional variety
- creation of new centralities in peripheral areas
- protection of natural resources
- optimization of urban grids for centrality and connectivity
How is value added in RED?
through facts: addressing legal and economic frameworks, constructive communication, and optimized processes (e.g. facts of Westside: prime location, world class architecture, 40% leisure etc. )
through emotionalization: enhancing user experience and appeal (e.g. Grindelwald: cosy wooden chalets)
through city repair: redeveloping historical areas and correcting past planning errors (e.g. Altstätten: Migros & Coop on opposite ends, in between are other shops, Rorschacherberg)
through city simulation: integrating functionality and experiences into development (combining shopping and leisure = experience, high quality architecture, centering development around suburban train stations)
Land per person calculation
size of CH (40’000km2) / population (ca. 8’000’000) ==> 0.005km2 land per person (5000m2)
Buildable land per person calculation
CH: 40’000km2
population: 8’000’000
land per person: 40’000/8’000’000 =>0.005km2 (5000m2)
buildable land: 6%
buildable land per person: 5000m2 x 0.06 => 300m2
