The commercial property development process

Abstract

This paper is concerned with the development of commercial real estate in broadly capitalist economies. Rational project planning for such development is not well advanced. Property advisers agree that the development process is infinitely flexible; circumstances alter cases. There is much objective knowledge about aspects of development, although decisions are often based on subjective personal experience. Academic research from various disciplines has concentrated on the process, providing a framework of ideas but little empirical support. How development projects evolve depends upon structural forces that are not only economic, and the actors who become involved. This paper argues that the nature of the site is also important. Analysis of literature suggests a model based on four “dimensions”, structure, actors, site and events. Two case studies from Newcastle upon Tyne and Cape Town are used to test this theory; these were researched largely by interviewing the actors. Software for development is underdeveloped. Financial appraisal packages merely crunch the numbers provided. Existing software does little to alert actors to opportunities, constraints and pitfalls or assist them with decisions. Research should aim to develop decision‐support software of real practical use to actors in the management of projects.