One of the many problems of trying to deliver high quality courses on real estate development is the sheer scope of the topic (contract law, planning, urban design, scheme design, financing, financial feasibility, business models, industry structure, risk and uncertainty, market research, construction technology, construction procurement, project management, marketing etc.). There’s a lot of disciplines, practical knowledge and potential theoretical perspectives there. There’s far too much for any single person to have in-depth specialist knowledge of it all. In addition, I’m also conscious that in lectures, assignments, we often miss out on the detail that can be crucial – key Heads of Terms in pre-letting agreement, the problems that you can have with the utilities, rights of light problems and costs, detail of funding drawdown arrangements etc. I was reminded of this by a piece in the FT on the additional costs that some developers in London are now incurring due to the problems of grid capacity.
According to property developers, agents and advisers, problems with electricity connections do not stop buildings being built. But delays of six months are common, and two years is not unheard of. The developer has to pay for upgrades to the network, and will be asked whether the new building really needs the amount of electricity proposed…Crispin Matson of Ramboll, an engineering consultancy, said: “You design a new building and say I want X, they say the connection will cost Y, which is not that much. But to do that, they say we will have to upgrade half the network nearby to cope, and that’s when it gets hairy. Those sums of money get very substantial, and the timescale is substantial as well.”
I’d like to find a way to give students a sense of the sheer depth of the detail of lots of elements of the development process. Getting our hands on the developer’s files from a few development projects might be useful. Of course, the architect, lawyers, planning consultants, contractors, agents etc. would also have their own files…Come to think of it, the paper mountain could need planning permission by itself.