Riding the Real Estate Cycle: Building Capabilities for a Sustainable Future [Report]

by wamda, May 20, 2013

This report, published by Booz & Company, explains the Arab world’s property market bust that exposed deep structural prob­lems in the region’s real estate development.

The report reveals major errors made by developers that led to the market's downturn, while offering a prescription for a more balanced and stable real estate market going forward. By following a market-driven approach to real estate development, the report concludes that the market will stabilize and new construction will move forward alongside real demand.

Major mistakes outlined in the report include:

  • No focus. Developers grew in all directions with unfocused business models targeting a range of assets in different countries, as well as multiple segments and classes.
  • Not profit-driven. Not having to worry about commercial capabilities and profits given the buoyant market, develop­ers rushed to deliver.
  • Poor risk-management. Most regional players had volatile revenue streams and managed risk poorly—depend­ing excessively on property sales, as opposed to recurring income from leasing and other operations.

Recommendations for moving forward:

  • Focus. Developers must first decide what kind of developer they want to be and where to operate on the real estate value chain.
  • Identify real opportunity. Developers should master their chosen markets, and understand all components of the real estate ecosystem so that they can identify and pursue attainable growth opportunities and create sustain­able value.
  • Follow a balanced plan. Developers should manage their exposure to market risk better by seeking more balanced revenue sources, and elaborating clearer investment and development guidelines.
  • Deliver on what matters. Real estate players should start developing a set of core capabilities (e.g., opportunity identi­fication, development, asset manage­ment) to deliver sustainable value.

Check out the full report’s findings by downloading it from the grey box on the right.

pdf(0.39 MB)
View 529
Download 955
 
Commentswith facebook
Commentswith Wamda
Sign in  to leave a comment
Not a member yet!
register now
Abdul bari Chanessra , Tue 08.07.2014
I truly feel comparing black and white digital cameras with it's motion picture counterpart is a lot like looking at apples with oranges. They just usually are not exactly the same thing in look and feel. besocial I reviewed this in depth in part 1 with this series. When conversing with photographer Hellen Truck Meene she explain video as getting "wonder". Now I'm unclear what the techical expression for wonder is but wonderfully I know what exactly Hellen signifies.
 
 
Abdul bari Chanessra , Tue 08.07.2014
People are really so much concerned about health related issues. I am now bookmarked to this site. SEO expert NYC
 
 
Abdul bari Chanessra , Tue 08.07.2014
Sometimes it is extremely difficult to explore good and useful information out there when doing research. Now I will send it to my colleagues as well. Thanks for helping me out. go to my blog
 
 
Abdul bari Chanessra , Tue 08.07.2014
I found useful information on this topic as I am working on a business project. Thank you posting relative information and its now becoming easier to complete this project. MSA 10107602
 
 
Abdul bari Chanessra , Tue 08.07.2014
This post has helped me for an article which I am writing. Thank you for giving me another point of view on this topic. Keep it up. go to website
 
 
load more