The process of changing and intensifying the use of land to product buildings for occupation can be known as property development. It is a high risk activity as it involves large amounts of money tied up in the process of production and providing a product that is relatively indivisible. In the development process, each stage are consists variety of important actors who contributes to the outcome of the property process and they may have different perspectives and expectations.
Landowner can be actively or passively in the development process. The landowner may actively initiate development to improve the value of their land. For the not active initiator, they may become the crucial hurdle to the development. Three board categories of land ownership which are traditional, industrial and financial. Traditional landowners include the church and landed aristocracy who are significant owner in term of area and capital value. Industrial landowner include farmer, manufacturing and other service industries who have their own purpose which may be some form of production or service provision. Financial landowner may be financial institution who have clear financial motivates. They may own a great proportion of land by capital value and investing in property investment.
Planner is another parties involved in property development. It can be divided into two categories which are politician planner and professional planner. Political planner are responsible for approve the development plans make up by the professional with the advice of professional employee. The other responsible of them is determining whether applications for permission for development proposals can be approval or refused. The main purpose of planning is to encourage development and avoid undesirable development. The policies of planning authorities are widely differ in development. Activity carry out in the area of low economic typically wishes to encourage development activities otherwise activity carry out in area high economic is imposing higher standard and improving design of building.
• Financial institutions
Financial institution include pension fund which called EPF in Malaysia, insurance companies and commercial banks. They provide two type of money required for development which are short term money and long term money. Short term money is used to cover the cost during development process, it also known as development finance. Long term also known as funding, it usually uses to cover the cost of holding the completed development as an investment. In Malaysia, developer must use the property as security when they make loan form bank.
• Building contractors
Building contractor is employed by a developer and their responsibility is to provide labour, material, equipment and service to complete the construction project. He carry out a specialist activity within the development process, commencing at a time if maximum commitment and the risk of developer. In Malaysia, the majority of housing developments do not involve in housing construction. This is because construction industry is competitive therefore developers do not find it profitable to construction the project themselves.
Agent such as professional valuer and real estate agents may be instrumental in initiating the development process or bringing together some of the main actors in the process. Agent has detailed knowledge of property market in term of demand and current price. Agent can make profit from the fees charged to their client when they carry out a professional service. Developer requires the knowledge of agent to help them in securing the necessary finance for development scheme.
1. (b) Discuss who should be included into the team if the out-of-town retail development carries greater risks than a residential development.
A large-scale, out of town retail development required a consulting team to reduce the risk. The following consultant is required to do market research during the initial stage.
• Professional marketer
Professional marketer is people who identify the strategies and attract customers to a business by using techniques. They have to do research, market analysis to understand consumer behaviour and market strategy. Professional marketer has to evaluate the demand and supply of the shopping complex at out of town. Assume that the shopping mall is targeting of female customer, a professional marketer can give suggestion such as having a child care centre in the shopping mall so that female customer can leave their kids there and focus on purchasing goods they need in the shopping mall.
• Experienced valuer
Experienced valuer is one of the consultants required. He will provide guidance to the developer on the fair market price of the land in a written survey of report. Therefore the developer will not buy the piece of land with higher price. Developer has more capital to spend in other activity such as marketing.
• Urban economist
Urban economist is assisting developer in identify structural issue and objective of territory for the next ten year. They will study on employment growth, firm opening in the town and effect of infrastructure investment on region to find out the pattern of future growth. At the same time, the barrier of economic development can be identified, the solution plan need to be prepared by urban economist.
• Real estate agent
Real estate agent can help in researching the local real estate market. They may have access to promote the shop lot in shopping central to the potential retailers with reasonable price. The different categories of shop lots will be given more options to the customer. This will attract more customers to the shopping central.
• Commercial complex property manager
Commercial complex property manager is the one who assist in preparation of the annual budget, tenant relation and also maintenance and repair of building. They have to take care of all the important detail to run a shopping central. They have to prepare the preventive maintenance schedule for all the equipment and system of the building. Therefore the shopping central has its own maintenance system. This will help to improve the equipment life and reduce the need for capital replacement.