Off-plan property sales as an innovative financing option in real estate development (original) (raw)
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International Journal of Economics and Finance, 2015
In the midst of the tripartite essential needs of mankind is residence, often called shelter. This inevitability of man, which is affordable through real property development, is money exhaustive and entails huge and enormous finance which is, as a general rule, beyond the accomplishment of equity capital; consequently, the inevitability of borrowing to finance housing development. Nevertheless, this "supposed to be" complement of equity capital has proved insufficient and unsuccessful over time, owing to interest, non-affordability, stringent and rigorous repayment requirements and others, in financing housing developments in Nigeria. The purpose of this investigation is to appraise and assess the perception and opinion of real property developers with reference to conventional borrowing and its attendant consequences and repercussion in financing housing developments with a view to uncover the potentials of 'Sukuk' as an alternative source of financing housing developments in NorthEastern Nigeria. Based on the findings of existing literature, it is sufficed to state that the performance of conventional financial institutions in financing residential developments is very low; developers' perception about conventional borrowing and its associated terms considerably influence their intention and decision to borrow in financing residential developments; developers have high preference for 'Sukuk', when obtainable, than conventional source of financing residential developments. This research would provide the foundation whereupon policy makers would evaluate and appraise the existing financing strategy to mirror the desires, yearnings, aspirations and diversities of all citizens; it would expose the gap in financing residential developments, thereby providing both local and international investors the opportunity to tap from unutilized investment opportunity; it would also provide the basis for solving the seemingly intractable residential development financing problems in Nigeria. This research would be the first to evaluate real estate developers' perception on borrowing in financing residential developments in NorthEastern Nigeria and probably the first to apply the theory of planned behavior in the field of real estate development financing, at least in Nigeria.
1 Real estate development An overview
2017
Real estate development is a significant factor in shaping the built environment. It shapes the way people live and work, and by doing so determines and enables human activity and its evolution. Around the globe, real estate development forms a contemporary reflection of societal needs and the market demand in particular geographies. Nonetheless, due to globalization we increasingly witness similar needs and demands for space despite institutional differences existing between countries and cities. Within each context real estate development is concerned with innovations, such as introducing new forms of development finance, setting up new types of development partnerships, or incorporating sustainable solutions within development processes. As such, the practice and science of real estate development are subject to constant change, reflected in a diversity of topics that are addressed in both academic publications and professional practice. As an applied and practice-oriented scienc...
Title: Innovative real estate development finance -evidence from Europe Structured
Journal of Financial Management of Property and Construction, 2016
Purpose: This research provides insight into large-scale real estate projects in Europe and how they are using a more innovative blend of finance. Design/methodology/approach: The methodology involved a mix of desk-based study, interviews and case studies. Interviews were held with financiers, policy makers, developers, investors, fund managers and academics. The specific case projects were Battersea Power Station Development in London; Leipziger Platz site in Berlin; and the Lammenschans site in the city of Leiden, Netherlands. Findings: The research found that there is growth in the blend of financial products used in real estate development within large-scale mixed-use projects. This new blend is set with greater equity financing, often from domestic and foreign consortiums generating institutional funds-alongside private debt financing that utilise a mix of large-scale multi-bank finance. Practical Implications: The scale of the challenge in financing real estate development allied with capital budget constraints has meant that the appetite for innovative finance mechanisms has gained considerable momentum in practice and policy. This research investigates current examples in development finance and provides a discussion of the opinion of key multi-stakeholder participants in the individual cases, and trends more strategically at a broader level. Originality/value: This detailed study of three major development sites and at a more broader strategic level is significant, in that it provides a better understanding of the differing blends of finance that are being used.
Routledge Companion to Real Estate Development
Routledge eBooks, 2017
The role of the private sector in shaping the built environment is historically evident and seemingly increasing in contemporary urban development practice. Traditionally, real estate developers and investors play a crucial role in realizing and financing urban development and real estate projects. In addition, other private sector actors such as owners, entrepreneurs, local citizens, and all sorts of corporations increasingly influence city-making, as redeveloping real estate and regenerating urban areas are becoming more common. At the same time, public organizations such as local planning authorities increasingly focus on facilitating such private development initiatives. Especially in developed (Anglo-Saxon) countries, a new phenomenon called private sector-led urban development is occurring, in which private actors perform a leading role in managing the delivery of urban areas and real estate. Nevertheless, this trend in urban development is not fully explored and understood in real estate and planning literature. Therefore, this chapter deals with private sector-led urban development by discussing various characteristics, typologies and practices. In particular, it discusses the contemporary and potential future role of private actors as a driving force behind developing urban areas and real estate. Thereby, it aims to contribute new concepts and empirical insights about the management and organization of urban and real estate development.
Evaluating Critical Factors Impacting Real Estate Development Decisions
Real Estate Management and Valuation
We find that critical factors affecting real estate project decisions can vary while market changes in the city of Ahmedabad have led to the majority of landmark buildings facing obsolesce, redevelopment and spatial redundancy. Case studies can assist in data collection in the cultural context and accommodate indirect observations of the variables analyzed in the early stages of research (Teegavarapu & Summers, 2008; Rowley, 2002). Decisions have led to capital losses for some, while bringing about profitable opportunities for developers who take timely risks. We also find that the land pooling technique used by the State in city development has successfully promoted land banking for public purpose but has also contributed to speculative land price appreciation. AHP rankings show that the surveyed practicing developers prioritized location factors such as neighborhood character and availability of land above land use zones and land auctions. Among project factors, FAR (Floor Area Ra...
Iconic Research and Engineering Journals, 2022
Housing has also been a subject of discourse. The role of developers as well as practitioners in housing delivery has also been appreciated as they have been in the forefront in meeting this need but, there has also been a challenge in meeting them. This study however identified the roles of developers and practitioners alike, including the challenges. This work was dedicated to finding solution via review of related and empirical review of literature. The study added that real estate practitioners should in addition to their established statutorily; search site for and establishing its potential, valuation, negotiation based on established potential, assessing rent, marketing, finding tenants and preparation of sale particulars, must do more in availing themselves in housing delivery by participating while ensuring that they are familiar with their statutory and professional duties. In addition, strategic planning via SWOT analysis was identified as key in responding to housing needs.
Innovative real estate development finance – evidence from Europe
Journal of Financial Management of Property and Construction, 2016
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Housing sales of real estate developers in Turkey
International Journal of Housing Markets and Analysis, 2020
Purpose Because of competition, residential property developers use a variety of promotional tools to gain recognition and increase their market share and the demand for housing, and to manage their customer relations. This study aims to examine what real estate developers did to detect the need for types of housing, and pricing and promoting housing. It also sought clues about how they manage customer relations in residential sales. Design/methodology/approach In this study, semi-structured interviews were conducted with real estate developers. This study has heuristic characteristics based on qualitative data. Document reviews, descriptive analysis and discourse analysis were carried out on the interview data and other sources. As purposeful sampling is generally used in qualitative studies; intensity sampling, homogeneous sampling, criterion sampling and snowball sampling were used together in this study. Findings The study found that real estate developers were inadequate at adv...