In our world today, where so much is digital, one of the most fundamental pillars of society is brick-and-mortar real estate. Built assets underpin so much of our lives, including fostering community development, creating employment opportunities, and supplying essential services. It’s where we live, play, and come together to nurture friendships and collaborate.
However, it takes a lot to bring these projects to fruition and the path to completion isn’t an easy one. From conception and planning through to construction, there’s a lot that goes into built assets with collaboration required across many teams and stakeholders.
In today’s marketplace, property developers across the Asia Pacific region will have many challenges to grapple with now and over the coming years, including:
Let’s dive into a bit more detail on these challenges, as well as how technology is supporting property developers to navigate them.
Despite access to financing being crucial for property development projects, developers are struggling to secure funding due to factors such as regulatory constraints, market volatility, and perceived risks.
In the first half of 2023, rising interest rates posed challenges for bank financing, resulting in a 24% year-on-year decline in real estate investment transactions in the APAC region. This decline was even more pronounced globally, with a staggering 54% drop, reaching its lowest point since 2010.
Without financing, projects may struggle to get off the ground.
With varying rules and regulations across countries and markets, the regulatory landscape in the APAC region is complex and diverse. When you’re navigating through things like permits, land acquisition laws, zoning regulations and building codes, projects can become hindered and delayed.
For example, shortcomings detected in the Opal Tower project in Sydney and the combusting façade in the docklands Lacrosse Towers in Melbourne prompted the Australian government to release the Shergold/Weir report on ‘Building Confidence’, listing 24 recommendations for the Australian construction industry and their supply chain to address.
In India, regulatory challenges such as land acquisition laws, environmental clearances, and local zoning regulations often lead to delays and increased project costs. According to a Knight Frank report, regulatory hurdles have resulted in significant project delays, with around 30-35% of residential projects facing delays in delivery.
Across the region, it’s clear that issues are resulting from the complexity of the regulatory environment.
Land is at a premium across the region, with rapid urbanisation leading to increased competition for prime land. This is driving up land prices, making it challenging to secure suitable land for development at reasonable prices.
In Singapore, land scarcity is a big challenge with the government tightly controlling land supply through its land sales program, leading to fierce competition and high land costs.
In Australia, land acquisition costs have also been rising steadily – particularly in major cities like Sydney and Melbourne.
Construction is going green, there’s no doubt about it. With growing awareness of environmental issues, there is increasing pressure on developers to adopt sustainable practices and build environmentally friendly structures.
With this comes a need for compliance with environmental regulations, green certifications, and addressing concerns such as carbon emissions and water conservation. Getting clear sustainability credentials is critical when it comes to attracting and retaining new customers, but it’s providing an additional hurdle for developers.
Given these challenges, it’s important for property developers to be across industry trends and how they can mitigate risk for their projects and leverage the latest tools to help their projects into completion.
These challenges may paint a complex picture for property developers to navigate, but there are clear solutions and the savviest industry players are embracing the latest technology tools to help them bring successful projects to life.
While many have started to digitise their workflows, often systems and data are disconnected, and frequently stored in separate locations. This can result in project teams working with incorrect or incomplete information, ultimately leading to rework and derailed workflows.
An ideal solution is the adoption of a single cloud-based construction project management platform such as Autodesk Construction Cloud, helping teams collaborate with ease across the project.
Recognising the critical role of data in informed decision-making is the first step in addressing the priorities of today’s property developer. Accessing the right data during construction, and retaining ownership of that data post-construction, can help reduce operational costs and optimise asset lifespan.
Adopting a Common Data Environment (CDE) to serve as a central hub for project information will streamline collaboration across teams by providing a single source of approved project data. Key capabilities of a CDE include a shared project workspace across teams, controlled access to stored information, a structured approval process to regulate data flow, and mechanisms for tracking and managing CDE-related activities.
In a nutshell, by implementing a standardised document management strategy and embracing a CDE, property developers can foster effective collaboration, ensure data security, and enhance project outcomes. Inconsistencies, rework, and misunderstandings are minimised, saving time and frustration.
To learn more, check out all the findings in the full eBook The Real Estate Developer’s Guide to Gaining Value Faster from Projects.
