How can you ensure the profitability of your real estate project?
Writen by Valentin Dubois ·
The real estate sector, after relatively dark years since the 2007 crisis, should benefit from a more favorable general economic climate for 2018.
What trends and forecasts for 2018?
Indeed, the European Union seem to be gradually recovering with growth and the sector is enjoying an encouraging economic situation.
In the United Kingdom, investments are coming back after Brexit and market panic has now passed. In France, the election of Emmanuel Macron and his liberal policy encouraging investment meets a strong echo with industry players. Finally, in Spain, the continuous economic improvement of recent years has had a positive impact on the real estate market, particularly in Madrid and Barcelona.
Nevertheless, a veil of doubt and uncertainty comes to blacken the picture somewhat. The uncertain consequences of Brexit and the difficulties of agreement with the European Union are worrying. While the claims of independence of Catalonia make the Spanish market unstable.
Moreover, while the incentives to invest are numerous and even urgent, the fear of a market at the end of the cycle is felt and with it reluctance to project financing; the current prices being too high, the higher interest rates, and this, making the significant risks.
Finally, the sector is facing new trends, giving rise to new markets such as co working, as well as new technological and digital practices.
These changes introduce new business models and increase the complexity and risks of the sector. If the future remains uncertain, it becomes necessary to develop new strategies and methods to face the competition, such as preparing the future of the market. Why not thanks to Location Intelligence?
What is Location Intelligence?
Location Intelligence is a Business Intelligence solution that allows you to analyse a geographic context and relate it to commercial data. Based on the analysis of big data originating from partnerships as public or paid sources of information, the solution aggregates these data to work and make them intuitively viewable in the form of a map.
Rental Intelligence tools are innovative ways to develop the real estate industry, which will allow you to ensure the profitability of your investments by discovering new opportunities and optimizing the promotion of your assets.
Why is the location fundamental to any real estate project?
It is obvious that the location of a real estate project, whether for commercial use or for individuals is essential.
Indeed, a real estate project is anchored in an environment, it must be in adequacy with the external factors of the zone which surrounds it.
Thus, it is fundamental to analyze an environment to determine if a specific project could actually meet with success at that location, or to get an idea of the characteristics of the project to be implemented for optimal profitability.
For example, if I want to create a high-end shopping center for young urban executives, if it is clear that it will make more sense to move to the city than to the countryside, still it to determine an exact place.
By determining the profile of the shops and restaurants you want to attract, you can draw the profile of their consumers and transcribe them into socio demographic, economic and behavioral characteristics.
Once the target is fully defined, still remains to define in which zone to meet the best one. This process may seem uncertain and time-consuming. This is where the Location Intelligence comes in.
In what way does Location Intelligence improve the management of real estate projects?
With a solution like Geoblink, you only need to capture the characteristics of your target consumers and the desired environment (traffic, competition, etc.). In a fraction of a second, the technological solution selects and classifies the areas that best meet your criteria, with a precision of a few meters.
Moreover, in addition to finding the best location for your project, Location Intelligence also gives you additional information on the area that can help you tailor your plan to accurately match demand in the area. So, if the best location selected for your shopping center project is in an area with numerous families, could it be wise to set up a nursery or offer some space for children’s clothing brands?
Therefore, with this knowledge, you will be able to adapt the project in terms of volume and layout: knowing exactly the area and its population, allows you to have a clear idea of the businesses that will be attracted by your spaces, and so to adapt these to the habits and characteristics of the brands concerned. Are you going to favor large spaces for mass retailers such as Zara or H&M, or more modest spaces for more upmarket and intimate brands? Rather, fast food stalls, or larger spaces for traditional restaurants?
Rental Intelligence allows you to rely on concrete data to adapt your project and limit the risks. The adaptation between the latter and the environment in which it fits as its commercial possibilities, creates a point of balance between supply and demand that will allow you to sell with more certainty, more speed, and this, making reach your break-even point in record time.
If you want to learn more about how Location Intelligence can help you implement your real estate and investment strategy, do not hesitate to request a demo.