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Analysis of Real Estate Developments  

Optimize Real Estate Development Opportunities with Financial Rigor

28-29 April 2025 in Dubai

This intensive program has been formulated to provide real estate professionals involved in the development process, as well as those working with them in support functions, a truly comprehensive foundation to assess and value opportunities.

This program is ideal for real estate professionals and corporate executives including:

  • Real Estate Developers, Investors and Analysts
  • Urban Planners and Project Managers
  • Real Estate Planning and Strategy Professionals
  • Real Estate Finance and Accounting Professionals
  • Bankers, Lenders and Real Estate Fund Managers
  • Property Owners and Support Personnel
  • Build an understanding of what drives the value of real estate development projects.
  • Explore the dynamic risk profile of investments in development projects and contrast them with ownership of real estate assets.
  • Learn robust real estate analysis techniques for development projects
  • Appreciate the multi-faceted skills and disciplines central to real estate development.
  • Understand how to strategically and financially analyze a real estate development proposal.
  • Identify flaws in commonly used approaches to the analysis of developments.
  • Acquire the insights and tools to robustly assess development projects.
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Without a solid appreciation of underlying risk and return equation, evaluations of real estate developments can easily be flawed. Real estate development is significantly higher-risk than the ownership of real estate assets, particularly early in the development cycle. This distinction is commonly not fully understood and in nascent markets where newer players often are making the transition from ownership to development, this may comprise a larger proportion of the participants.

Real estate development is a multi-faceted enterprise; often each new development akin to creating a new company. As with a startup, from idea conception, market and product definition, to acquisition of resources, financing, construction, governance and marketing, all have to be put in place at the beginning before the venture becomes viable. Appreciation of urban economics that underlies real estate value is crucial in identifying and structuring profitable real estate development opportunities. A financial evaluation needs to be complemented by a thorough assessment of the entire process within the external context.

The course discusses real estate investment principles and practices with a particular focus on development activities. This requires a comprehensive understanding of both modern finance and economics, and the institutional features that differentiate real estate from other asset classes and markets.

1. Overview of Development Process

Graaskamp model of real estate development.
Types of development. 
Competitiveness in real estate sector.

2. Pre-requisite Principles for Real Estate Development Analysis

Property value as the benefit side of real estate development cost-benefit equation. 
Why are developments riskier than properties?
Relating key drivers of risk for developments and properties.
Development analysis in the language of net present value.
Building a feel for why NPV should be close to zero for competitive industries, like real estate development.
Simple models of real estate analysis using cash flow perpetuities.
Review of income capitalization approach.
A framework for valuing properties.s of risk for developments and properties.

3. Simple Evaluation of Development Projects

‘Back of the envelope’ analysis of real estate development projects.
Information requirements.
Site looking for a use analysis.
Use looking for a site analysis.
Pros and cons of such simplified analyses.

4. Evaluating Real Estate Developments More Robustly

Real estate property as the “end product” of a development initiative.
Phases in development.
Embedded high operating leverage in real estate developments. 
Variation in risk across the development horizon
Phased cost of capital for development projects.
Irrelevance of financial leverage in development analysis.
Pitfalls using IRR in evaluating developments.
Step-by-step NPV framework for development projects.
Guidelines on establishing multiple discount rates.

5. Understanding Land Value

What to maximize: land value or developer profits. Land value in the context of urban economics.
Highest and best use.
Limitations of discounted cash flow based techniques in valuing land.
Development as a real option in assessing land value.
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