Property Development Stages: What does each involve?

with No Comments

 

A typical property development project can be divided into several stages, each of which involves different processes and considerations. Here are the stages of a typical property development and what is involved in each stage:

Land acquisition: This stage involves identifying a suitable parcel of land for development type you have in mind and negotiating the purchase price. The developer will also conduct due diligence to assess the site’s suitability for development, including factors such as zoning restrictions, environmental considerations, and potential legal issues. This is often referred to as “doing due diligence” and is undertaken once you have secured the site but prior to committing to the purchase as it may involve some monetary investment to get it right. Essentially you need to identify the variety of uses that the property may suit, or that you wish to do and it’s feasibility, particularly within your own likely financial constraints.property development stages

Conceptualization and design: In this stage, the developer will work with a project manager, engineers, designers and other professionals to create a preliminary design for the development. This will apply for both subdivisions and building projects. This will involve creating a site plan and ensuring that the proposal is generally in accordance with the local authority’s town plan.

This may also involve conducting market research to determine the demand for the type of property being developed.

Planning and approval: The developer will work with local planning authorities to obtain necessary permits and approvals for the development, commonly referred to as a DA. This will involve submitting a preliminary planning application, possibly requiring public consultations, and responding to objections or concerns raised by stakeholders including the Council, other local authorities and possibly members of the public.

Detailed Design – Operational Works: Once planning permission is received the permit will outline a variety of conditions that the proposal will need to comply with. These are wide ranging and may include things like road design, environmental considerations, engineering, traffic planning, and stormwater calculations just to name a few. It includes providing or upgrading all infrastructure required to support the project. This necessitates the appointment of specialist consultants in each of the required fields to prepare specialised reports and designs which are vetted by the authorities and need to be approved prior to the commencement of any works. This is known as operational works approval [OPW] or building approval [BA].

Tenders / Quoting: This stage involves seeking competitive pricing from competent qualified contractors to carry out the works and may involve putting out a tender for bids or obtaining quotes from several service providers. Accurate documentation is key here and the ability and experience to vet and compare submissions.

Financing: Once planning approvals have been obtained, the developer will need to secure financing to fund the construction of the development. This may involve seeking loans from banks or other financial institutions or raising capital through investors.

property development stages
L-R: Robert Friedler, Graham Quirk, Jacon Parry, David McLachlan at Lone Pine Project.

Construction: Once the developer has selected a contractor or contractors, the construction stage begins. This involves managing the construction process, ensuring that work is completed to a high standard, that it is compliant and managing the budget and timeline.

Plan sealing: The final stage of the development process involves having the plans sealed and approved by all of the relevant authorities. This confirms that the construction has met all regulatory requirements and that the project can proceed to completion and occupation or the issue of new property titles. Typically at this stage, aside from inspection fees the developer will be required to pay a substantial monetary contribution toward infrastructure works and community facilities that are external to the project, prior to receipt of their sealed plans. This is for things like parks and gardens, sewerage treatment plants and trunk road works to name some.

Overall, property development involves a complex series of steps, from initial conceptualization to the final stages of construction and operation. Developers must be able to navigate regulatory hurdles, work with a variety of property development professionals and service providers to design the property, manage construction crews and contractors, and market the finished product to potential buyers or renters. Effective management and oversight are critical to ensuring the success of a property development project. This is where appointing a competent project manager becomes important to ensuring success. Here at SCM we have often used the phrase “From Concept to Completion” to describe the services we offer.