Real Estate Crisis: GeoConsulting presents the strategy(ies) to adopt to maintain the profitability of your projects through a series of several articles.
With the rise in interest rates and VAT, inflation, and the increasing cost of materials, a climate of concern continues to grow in the real estate market in Belgium.
A market that is slowing down, leading real estate actors to ask numerous questions. It becomes crucial to minimize financial risks and anticipate the new variables that are further destabilizing an already crisis-ridden market.
But how can you secure your projects and arm yourself with the best arguments to ensure the success of coherent and profitable developments? We propose to explore several avenues to assist you in these decision-making processes.
In this article, we will briefly discuss different approaches and how geomarketing can address certain issues. Through upcoming publications, we will present actions and case studies conducted with our clients or specific services. A series of 3 articles to provide you with concrete strategies to maintain the profitability of your projects.
1) Targeting Your Prospecting Zones
“Everyone is looking for the same type of land in the same areas.” If, in the past, developers could be content with opportunistic prospecting, land pressure has become too significant and concentrates potential in more limited areas. When an opportunity arises, it is crucial to position oneself as quickly as possible. This is only feasible based on constant monitoring and regularly updated clear indicators. To focus your teams’ efforts on territories that hold the most potential for your projects, it is essential to identify the best areas for prospecting in advance. By selecting indicators that are most conducive to the profitability of your projects beforehand, it is possible to geographically target areas with very high potential and prioritize them. Which areas will ensure a sufficient margin and minimize the risks incurred the most?
The result? The possibility of concentrating your land search on a few neighborhoods rather than the entire Belgium
2) Determining the Captable Potential in the Market and the Municipality
Once these preferred areas are identified, analyses can more accurately assess the potential demand, existing residential supply, future prospects, etc. In the current context, it has become essential to understand the local market, the needs of the neighborhood, and also integrate the political ambitions that influence the area. How can the project address the challenges of the municipality and its elected officials? How to promote a project that can fit into a win-win strategy for the territory and its stakeholders?
3) Optimal programming
Identifying the captable potential allows determining the ideal programming for the project, both in terms of needs and financial profitability. What granularity will ensure a fast turnover rate of the proposed housing? What mix of functions to offer considering the existing supply and current trends? Which functions to associate to guarantee a balance and mutualization of the proposed services and infrastructure?
4) Being Faster Than Others
“Time is money,” the saying is even truer when your competitor concludes an agreement on a piece of land your teams have been prospecting for a long time. Many pre-analyses are often skipped due to time and budget constraints. So, how to make the most of this precious time? Anticipate first, but also facilitate the work of your prospecting team with decision-support tools. For example, analyses and software that calculate the potential of an area, identify its main characteristics, and centralize relevant information in a few clicks. These also provide valuable data to investors and banks to support your files well in advance of your efforts.
5) Including the Right Stakeholders at the Right Moments
Obtaining permits is often lengthy and tedious. How to guard against refusals, appeals, and various complaints? Have you identified all stakeholders who can influence your project? Participation is often seen as a hindrance in real estate projects, but user assistance can also serve as an acceleration lever. Mapping out the stakeholders helps identify the roles and powers of each actor, their interests, and their weight in decisions. Listening to them and integrating them at the right phases of your project can save you valuable time and enrich your file with additional information. Some interviews ahead of your projects can sometimes spare you years of legal appeals and debates.
Conclusion ?
As you have understood: the real estate market is going through a complex period. To keep your investments afloat, errors are no longer allowed. It becomes crucial to reduce risks and anticipate as much as possible the obstacles that may be encountered.In our upcoming publications, we will delve deeper into some of these solutions and share case studies conducted to address these challenges. Stay tuned for more in-depth information and concrete strategies to successfully navigate this demanding real estate landscape.
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