Commercial property development is the planning, construction, or usage of real estate for commercial, retail, industrial, or office purposes. In its simplest form, commercial development refers to a project that involves the development of land for non-residential usage. In this article, commercial property development UK, we take a look at the process involved.
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Things to consider when developing commercial property
Finding a suitable site
To develop real estate, you must first obtain an appropriate site. Successful commercial property developments are constructed on sites that have the potential to address an unmet neighbourhood demand, such as new housing in a rapidly growing region.
Certain developments, particularly in urban and suburban settings, may be constructed on previously undeveloped land. Others may be built on land that is now occupied by another building.
After locating an appropriate site, the developer must acquire it outright, through a joint venture, or in any other manner that permits the developer to proceed with the intended project.
When deciding whether or not a potential development site is suitable for a particular type of development, it is critical to consider its location. The location of a completed development project dictates its worth. Different types of development require different characteristics. It is vital to establish an area’s value in order to meet specific requirements. If developments are more user-friendly, their chances of profitability increase.
Preparations for development
After acquiring the site, measures must be taken to prepare the land for development. If the land on which the project will be built is currently undeveloped, the developer is responsible for clearing the area of natural features, supervising the installation of utilities such as water, sewer, electricity, and roads, and performing any other work necessary to prepare the land for construction.
If the land is in an urban area or has already been developed, the process will be slightly different. While the eventual goal remains to prepare the site for future construction, any existing structure may need to be demolished totally to allow the new project to proceed. Each of these possibilities will require a specific approach to land preparation and may require distinct legal and financial mechanisms to be successful.
Additionally, the complexity of gaining planning approval varies significantly by locale. Certain areas have extremely challenging planning authorities that appear to say “no” to everything. Other places are much more open to planning permissions, allowing for a more speedy and risk-free endeavour.
The build process
After the ground has been completely prepped and planning permission is in place, the next stage in the process is to begin building the property. This is the stage at which the structure begins to take shape, from the foundation to the last details.
As with the preceding step, this one is very variable, based on a variety of elements including the project’s complexity and scale, the type of property, and the area in which the development is located.
Find a suitable tenant
After construction is complete, the next stage is to find tenants to occupy the property. Almost every commercial property development seeks to produce space that will be leased to tenants, generating revenue that will result in a property valuation larger than the cost of development.
This stage can take a variety of forms. Certain properties are constructed specifically for a certain tenant. In this case, the tenant has been identified from the start of the project, and the property has been designed with that tenant in mind, frequently with his or her input and direction. Other properties are constructed “speculatively,” which means that no tenant has consented to take possession of the property upon completion. In this instance, the developer has speculated on the demand for the property they are building.
In either case, there must be a transition from building construction to tenant occupancy, resulting in cash flow that stabilises the financial situation.
Sale of the asset
At some juncture, the developer will probably look to reap the rewards of the property’s development by selling it. In reality, this can occur in a variety of ways. One possibility is that the property (with or without a tenant) is sold outright to another owner. Another possibility is for the developer to refinance the property in order to pay off any outstanding construction debts and then maintain it in their portfolio for as long as they like.
Certain property development firms focus exclusively on property development and always sell the property upon completion, while others have various divisions that can manage the transition from development to operational stages internally. Sometimes, the developer’s decision to hold or sell is influenced by market conditions, financing possibilities, or other opportunities accessible to him.
How we can help
We have a proven track-record of helping clients with commercial property development in the UK. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Commercial Property Solicitors
It is important for you to be well informed about the issues and possible implications of commercial property development in the UK. However, expert legal support is crucial in terms of ensuring a positive outcome to your purchase.
To speak to a member of our New Enquiries Team today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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