LOCATION ASPECTS OF PROPERTY IN REAL ESTATE

SUBMITTED BY:PITER BISWASSPA Bhopal

Location analysis (site and its neighborhood)

Market research (demand and supply dynamics)

Concept development (site planning, master planning)

Financial analysis Marketing and sales

Land has special characteristics compared to other economic goods:

the supply of land is fixed (with the exception of land reclamation) every parcel of land has a fixed location, which is a unique property and the use of a parcel of land affects the use and value of

surrounding parcels This last property, which is called an externality of land use, gives

rise to government intervention. The special characteristics, the externalities, and intervention

make an analysis of the land market rather complicated. Location analysis of a site cannot be separated from the life cycle

of a neighbourhood as it links site to the highest-and-best use Nature of the relationship among uses is determined by economic

functions The purpose of Location Analysis is to identify the characteristics of

location which affect the value and economic life of a specific property.

The analysis of location requires a determination of desirability and utility of the site and the degree and extent to which the site shares the market for comparable and competitive sites in the community.

The analysis of location requires a forecast of the changes likely to be experienced at the site due to probable future trends.

An appraisal of the present situation and knowledge of the trends which affect the valuation of real property is necessary to properly analyze the location.

The principle of change is fundamental to real estate appraising and to the analysis of a location.

Value is created and modified by economic, social and governmental changes which occur outside of the property itself.

It is necessary to predict the direction of the trend and determine the future effect it will have on property values.

Micro market demographic

s

LandAvailability

Competition profiling

Catchment analysis

Accessibility and

infrastructure

Immediate and perceived Demand

and supply scenario

Absorption rates

physical and legal attributes of a property project are evaluated in relation to location e.g. zoning, topography or terrain, infrastructure, and skyline of the city.

the internal space planning of the site and its immediate surroundings

the project’s characteristics: the relationship between the site and its use and the total surroundings, over a given time frame

the overall structure of an area within which the project lies and the interrelationships within a community’s land use pattern

Relationship between the surrounding environment and a specific land use on a specific land parcel over a given time.

a function of time as well as space.Physical location: the geo-position of one

site relative to that of another.Economic location: a site functions as a

locus of economic activity in association with other loci within a dynamic urban fabric.

number of sides of a land parcel, a multi-sided parcel is more suitable for retail, One-side parcel is more suitable for residential

functional layout of the facilities on site: ease of ingress to and egress from the site , Placement of structures and parking areas, key to the site’s marketability degree of “friction”

how well the site is linked to its environment.: traffic flow inward or outward (goods, services, or people)

convenient access with a minimum of aggravation, mode of transport for goods, overall access to the site

flow of traffic within the site: On-site “friction” can be reduced by the placement and design of facilities, which should ensure that the property has market appeal, both functional and aesthetic.

site is physically fixed but economically flexible. forces outside the land parcel alter the relationships of uses.activities conducted on the site and the economic nature of the site can

change. the placement of spatial attributes and layout

The dimensions of the site, size and area, shape of the property Frontage, access and accessibility Placement of existing structures

how these attributes relate to specific functions begins with a specific site within the context of specific use.

the locational characteristics of the neighbourhood and catchmentConnectivity and linkages to urban centers. layout of basic amenities and facilities & general maintenance

requirements. highest best use as per market analysis or appraisal.

Demographic and social profiling of the area.identification of the activities in the area.study of the nature of the associations between

these activities.analysis of the accessibility of the site to the

surrounding area.evaluation of the impact of the total area on the

site’s use.economic activities in the neighbourhood or

trade area delineated by: physical, political, and socio-economic boundaries.

time-distance relationships (travel times) to and from common destinations.

Existing land uses to a major economic base study.

Population countsAge profileSpending habitsAverage spending profiles (by product)Social classNearby facilities (ATMs, Petrol Stations, etc)Population projectionsCounts of housing under constructionThematically shaded maps showing, for

example, percentage population growthAffluence profiles, matching locations to

your most profitable customer segments.

Gather data for specified shopping areas.Understand peak trends and periods of

Footfall.Define the age and gender proportions of

the shoppers.Provide solid data to support rental reviews.Understand the consumer timing

trends(daily, weekly, and monthly).Pinpoint high volume locations within the

shopping area.

Consideration must be given to economic trends of the neighborhood, such as:

Industrial, commercial, agricultural and retail sales activity.

Price and wage levels - purchasing power of individuals.

Employment. Supply and demand for dwelling units. Taxation levels. Mortgage interest rates. Building costs. Population change. Activity in the real estate sales market.

Degree of convenience or inconvenience involved in moving people, goods, and services between different loci of activity.

Degree of friction, or inconvenience, measured in terms of time, cost, and aggravation. Accessibility is akin to negative transportation costs.

site’s accessibility cost to get to the site potential site return.

Property values are more likely to increase in the future at two types of locations:

Locations with favorable market fundamentals, that is, high demand and low supply (market driven-value increase potential).

Locations that are about to strengthen their locational advantages due to new major developments and urban transportation and infrastructure projects (development driven value increase potential).

Highest and best use is defined as that logical, legal, and most probable use which will yield the greatest net income to the land over a sustained period of time.

It is the most profitable, logical, and legal use.

The four standard tests for highest and best use relate to that use which is:

physically possible, legally permissible, financially feasible, and maximum productive.

Innovations in Real Estate Design - ”The critical influence approach to effective Work environments” by Diane Steigmeier 2008. Inside Gartner group Vol.XVII #7 Core Net The Leader March/April 2009 “Measuring the Added Value of Corporate Real Estate Management” by Anna-Liisa Lindholm & Karen M.Gibler 2006 Joshua Greenbaum, Principal Enterprise Applications Consulting Winter 2007 www.ibef.org John M. Quigley University of California, Berkeley, USA or [email protected]. K. E. and Shiller, R. J. (1990) “Forecasting Prices and Excess Returns in the Housing Market,” Journal of the American Real Estate and Urban Economics Association. Green, R. K. and Hendershott, P. H. (1993) “Demographic Factors and RealEstate Prices,” NBER Working Paper Series.Reichert, A. K. (1990) “The Impact of Interest Rates, Income, and Employment upon Regional Housing Prices,” Journal of Real Estate Finance and Economics. Justin Curlow [email protected] Peter Hobbs [email protected]

Thank youThank youfor your kind attention and valuable time