Development Process

1) Initiation 1) Initiation
2) Evaluation - development initiated when a land is ripe for different/more intensive use
3) Acquisition - due to anticipated demand in a locality, search for suitable land
4) Design and costing
5) Permission 2) Evaluation
6) Commitment - work out various design and type of property after doing market research
7) Inplementation - financial viability study (land cost, building cost, consultant fee, promotion cost)
8) Let / manage / dispose - profit & cash-flow study
- issue of profit and risk （higher profit but too risky)

3) Acquisition
- legal investigation （land encumbrances, caveat)
- ground investigation (soil investigation, infrastructural services)
- finance (bridging loan to buy land, end-finance for purchaser to buy property)

4) Design and costing

- design brief
- more detail cost with firmer design
- QS involved
 Development Process
rent/more intensive use
suitable land
r doing market research
onsultant fee, promotion cost)
ural services)
purchaser to buy property)
5) Permission
- conversion of land if required
- planning layout approval submit by developer (type of design, density allowed)
- building plan approval submit by architect
6) Commitment
- developer normally borrow from bank (bridging loan)
- all approval shall be obtained
7) Inplementation
- reliable cost budget must established
- construct
- project manager appointed to monitor and control cost and time
- architect chair meeting to review progress
8) Let / manage / dispose
- if meant to invest, look for suitable tenant to lease
- for residential development, meant for sale
- for strata development (flat), developer to maintain common property
during initial period until issuance of strata title
SOURCE OF FINANCE

1) Historical Perspective
- Security, First claim over the land - The players, direct and indirect ownership
the players
- Short-term / long-term loans - pension fund
- insurance company
- Inflation and Insrance Companies - life insurance companies
- investment trust
- Blurring of roles by leaders - unit trust

- Property collapsed in 1972 Goal → to maximize return with minimum risk

→ long-term investor but often take short-term view
- Insurance companies became developers
3) Banks and building societies
- two form of lending 1) Hedge against inflation
- corporate lending
- short-term loan 2) Institutional lease
- loan criteria
- nature / size of development company 3) Illiquidity and indivisibility
- nature / size of development - cannot be sold quicky (expensive)
- length of loan - canot be sold in smaller unit
- strength of security offered
- corporate loan criteria
- financial strenght
- property asset
- track record
- profit and cash-flow of the company
4) Propert Companies and the stock market
- Share financing → selling share to public at stock market , initial purchase offering (IPO)
- Equity financing → public invest and participate in the profits and risks of the company

5) Real estate investement trust (REITS)

- taxation incentive (advantage)

6) Oversea investor
- foreign investor to participate in propert investment

7) Private individual
- disadvantage
- risky investment
- intense management required
- regular void
8) Joint venture partners
- reason
 - without which he cannot secure the land / finance
- share risk / reward with other party
- in large project, it is prudent to spread risk
9) Government assistance
- qualified developer who engaging in society-useful projects
- eg. To build local shopping mall in order to pur local economy
 2) Financial Institution
ct ownership direct ownership → ownership of completed let development
indirect ownership → ownership of shares in property
investment company / development company

pension fund → manged for emplyees of former / present nationalized industry

life insurance company → invest premium received from
insurance policy to meet payment whenever they occur
unit trust → for unit-holders who are unable to direct investment
rn with minimum risk
or but often take short-term view

6 characteristic
4) No centralized market place 6) Research and performance measurement
- no central market for property transaction - rent & yield to compare property's performance
- high transaction cost - research needed for propert investment

5) Management
- high and troublesome maintanance (strata building)
- poor management / maintanance reduce propert value