Various trends have emerged to enable stakeholders in property development to respond to different forces that affect the industry. Being conscious of these trends will enable you to know how you can plug in, and the opportunities that you can take advantage of: –
Some of the trends that you need to look out for include: –
1. Buyers moving out of urban areas
Whereas many people have always opted to live in close proximity to urban areas perhaps due to their amenities, there has been a trend where more people are choosing to purchase property outside the urban areas. This trend can be attributed to government infrastructure projects which have opened up the urban areas’ outskirts to development and investment.
Infrastructural projects have made it possible for people who work in the city and its environs to live farther away. As a result, developers have moved in to meet the increase in demand for housing and other developments in places that are relatively far from the city. Devolution has also opened up otherwise remote areas while also holding great promise for future development which is attractive for speculators and investors.
2. Investment in fuel stations and mini-shopping malls
You have probably come across a mini-shopping mall or a new fuel station in your area in the recent past. These businesses have been sprouting as people seek more convenience to match their busy schedules. Everyone wants to access basic services in a place that is close to them and where they can get services quickly. Stakeholders in property development, including financiers, have not wasted the chance occasioned by this demand. If you are in the property development business, you may need to consider investing in projects that are outside the traditional residential buildings.
3. Developers shying away from certain parts of the city
There has been a trend of developers moving from some parts of the city to others due to factors such as congestion, change in consumer demands, and hiked prices of land which reduces the economic feasibility of a development project. Some places that were previously considered to be prime and attractive for investment are increasingly being avoided by developers. Regulatory requirements in residential areas have also forced developers to consider putting up their non-residential projects in the city’s outskirts. Developers and financiers to understand this trend to avoid embarking on white elephant projects.
4. Green building and sustainability in developments
While regulators recommend that 10% of ground space on land earmarked for development be reserved for green areas, many developers have taken initiative to invest in green sustainable projects. Many upcoming projects that have embraced biophilic designs and are focused on sustainability. The green building trend has seen developers adopt the zero-tolerance to energy waste concept. Developers have also embraced the idea of “bringing the outside in” which involves making developments that mirror the natural environment as much as possible. Some developments have also been inspired by the physical environment around them. For instance, the 3408 Belva building in Parklands was inspired by the Karura forest.
5. Alternative Financing
Developers have traditionally worked with banks as a way of funding their projects. However, due to difficulty in accessing credit from banks with lenders asking for more collateral from developers owing to the high credit risk in the sector, many developers are seeking alternative ways of funding their projects with little or no reliance on banks. Financiers have established creative ways of providing solutions to developers through alternative arrangements such as equity partnership, joint ventures, development Reits or providing loans with less collateral requirements or more flexible terms. Investors are now spoilt for choice on how to finance their projects.