“With reference to a commercial property in either China or the UK, explain what issues a developer must consider in order to minimise economic and financial risk with the aim of maximising their profit, irrespective of whether they wish to sell the property, or retain and manage it as an ongoing investment.”
In order to answer this question, you must:
1. Choose an existing property not more than 10 years old and assume (pretend) that you are a developer who is building it now. Include in your essay a location plan and a photograph or other image of your chosen development. For the purposes of this assignment, assume that there are no existing occupiers or legal title issues. You are going to develop a ‘cleared’ site.
2. Consider the options available in order to finance your development. You only have 10% of the cost of construction ‘in the bank’ (equity). What options are available for you to finance the remaining 90% of the project; which option(s) will you choose and why? Please provide the reasons for your decision.
3. Consider how you will maximise your profit: Using economic theory explain how you can minimise your costs and maximise your revenue?
4. Identify the ethical issues likely to be involved with your development and explain how (having regards to RICS professional and ethical standards) you will manage any ethical issues or conflicts
