Developers and landowners tend to fall into two main camps when it comes to land feasibility assessments. The first camp is a complex messy process where you’re managing a myriad of consultants, designers and surveyors to understand the development opportunity. The second camp is based on taking a risk and trusting your judgement as time and/or budgets are limited. Both options are far from ideal. There must be a balance between how much resource is committed early-on vs the level of risk you are happy to take. After all, the land, potential project or portfolio of sites may or may not be commercially viable plus the initial outlay is lost if you don’t secure the site.
So, can the Proptech market make this process easier for developers and landowners to make informed decisions? What innovative Proptech tools exist that support better ways to assess the value of land and the size of the opportunity? Are there faster ways to get outcomes based assessments to see if a land deal stacks up financially? Or even can the proposed scheme even really be built?
This blog will:
- give an overview of the four key areas for Proptech tools designed to improve the process and efficiency of carrying out land feasibility studies.
- identify how technology can help developers and landowners to reduce risk and provide more certainty on potential investments and opportunities.
Finance appraisals – the business case
The fundamental financial element to build for a land feasibility assessment is the business case as it lets you know if the financial aspects of the site work. It informs whether you should take action to bid for a site, build it or sell it on. From this you can assess whether financially a project is worth your while, the likely level of cost and potential profit and decide if this meets your overall business goals.
Here are some of the financial appraisal tools on the market designed to move landowners and developers away from spreadsheets and onto automated systems based on data.
According to Aprao “they are an online platform for the creation and management of property development appraisals. Their cloud-based appraisal platform enables property developers to increase their speed, efficiency, and accuracy when packaging new funding proposals.”
The ARGUS Estatemaster is a property development feasibility software that according to the company “provides a powerful, flexible and easy-to-use development feasibility and appraisal software and allows you to forecast the financial feasibility of a project using a discounted cash flow analysis to ensure the best financial outcome for your property development project.”
Key consideration
The final financial results are only as good as the underlying data that forms the financial assessment tool itself so make sure you understand how this has been derived.
Environmental, social, and governance (ESG)
The built environment is facing ever increasing calls to deliver sustainable solutions with targets that are becoming ever more stringent and harder to meet being introduced by investors, Governments and clients.
ESG has grown in importance with high profile investors such as Blackstone strengthening their leadership teams recently to bolster their ability to make more socially conscious investments and to screen potential investments. Coupled with a major push from major investors, public sector bodies and consumers who are all willing businesses to do more in this area with success criteria increasingly being weighted towards economic and social value.
The following tools help companies understand the types of actions they could be taking in terms of aspects of ESG assessments and once a project is operational can then form part of the evidence gathering process to demonstrate that the project has delivered on its initial ambitions.
One Click LCA is a potential tool that can support ESG and they say “that they are the #1 easy and automated life cycle assessment software that helps you calculate and reduce the environmental impacts of your building & infra projects, products and portfolio.”
Ramboll’s GreenScenario is another tool that operates in the ESG space by simplifying how to plan climate adaptive developments, providing cities and developers with a software-augmented planning process that combines analysis, simulation and collaboration on a single, user-friendly platform. Learn more about GreenScenario here.
Key consideration
Sustainability has historically been considered late in the project process. The earlier these tools are used, the bigger the impact they can have by driving early massing decisions to give the best chance of achieving ESG goals.
Data gathering – collating and streamlining information
Data gathering is an important aspect of land feasibility assessments. It is where developers and landowner gather together the available data sources for a site or multiple sites to understand the risks involved in a project and the potential opportunities.
Gathering masses of data is one thing but being able to rationalise and streamline that data so that it informs strategic decision making is key. Having too much unfiltered data can actually be more of a hinderance than a help. The following tools streamline the key data sources required for land feasibility studies and make it easier to make decisions.
LandInsight is a tool to designed to simplify site sourcing. LandInsight says that they “find and assess off-market opportunities with less competition, and bigger margins. Contact the owners, make data-backed offers, and close the best deals.”
VU.CITY says that it “helps people organise, visualise & analyse city data in the clearest & most accessible way to make better decisions and is accurate to 15cm. VU.CITY integrates data and demonstrates the real life impact of buildings on their surrounding environments.”
Another tool is Urban Intelligence who we worked with closely on the TfL Mass Land Study and says that they “exist to transform the way that the world values land and property and have been building the UK’s most comprehensive database of planning policy information. This provides us with a highly unique and unmatched view of development potential and constraints across the country.”
There are also general geographic information systems (GIS) platforms that bring large amounts of data together. But traditionally GIS platforms are highly complex and tend to be developed and run by specialists in big models. The traditional GIS solutions are often not accessible for the person who actually needs to consume the data. The emerging solutions described in this section have the potential to be much more accessible to all parties who can and should have influence on development decisions.
Key consideration
Yes, data is useful, but the interpretation of the data is crucial to ensure risks are understood and mitigated in any development. Hence often these platforms, in combination with your experts can give you confidence in your decisions.
Generative design – creating 3D models using site specific data and algorithms
Generative design software tools look at the potential for a site or multiple sites taking into account the precise site conditions, variables and constraints. Some of the key areas assessed include potential density, massing, site based risks and engineering challenges that can then be factored into the overall land feasibility assessment.
Generative design tools take a more informed look at the design and construction possibilities for an early stage site and allow clients to work with consultants to help identify and manage and understand how they can be mitigated. This can then inform the financial appraisal with quality data-led design solutions which are both optimised and buildable.
The advantage for these tools are that they enable multiple scenarios and iterations to be modelled in a virtual space so that developers and landowners get fast, rapid results by using algorithms to give you real, detailed options.
SiteSolve is a technology led platform driven by Ramboll’s technical consultants that helps public and private sector clients understand the potential viability and options to unlock and realise the opportunities from their land assets. By offering developers and landowners a chance to collaborate in a virtual space, our engineering-led team can help you to generate, iterate or create ideas for your site quickly and find the most optimised, robust solution based on real technical data.
Architectural firms such as Gensler a generative design tool in 2020 called Blox™ which it says is “allows our designers to bring deep domain expertise and design heritage powered by market and project-specific metrics balancing form, function and business insights to take our clients on agile and predictable design engagements.”
Key consideration
Generative and algorithmic based design is great for removing the laborious and time consuming part of the early massing process, but it doesn’t replace creativity. These tools can allow you to rapidly understand your options so you focus your creative efforts and avoid wasting time.
In an ideal world, clients would be able to have a ‘one-stop-technology-shop’ for land feasibility tools. It would be a single tool covering all aspects of the land feasibility lifecycle process. And would supersede the current requirement to use a number of tools and consultants to carry out the priority assessments of your site. With a highly fragmented model such as the construction industry model, having one tool to do everything just hasn’t been possible.The Utopian Land Feasibility Dream
Companies such as Katerra who have attempted such an undertaking have required significant investment and sadly also recently failed. As an industry we do acknowledge this dream and that we all need to collectively work towards but there is still quite a bit of work to do here.
As more and more tools come onto the market, software developers will need to support landowners, developers and their specialists to understand how new Proptech software can integrate and enhance existing workflows to ultimately improve the quality and speed of land feasibility studies. The overall aim must be to make the most of technology and experts to reduce risks and capitalise on opportunities in a sustainable manner across the project lifecycle.
