This module/textbook is offered as a basic knowledge module for Land & Real Property Valuation undergraduate program students in the Dire Dawa University. It comprises an aggregate of selected topics with the aim of enabling learners gain fundamental knowledge in areas related to real estate development, real estate development valuation and sit appraisal. As well as real estate development management system, various actors in real estate development, measuring rate return in real estate investment , real estate investment decision and real estate investment risk measurement. In addition, the module deals with the nature and practice, police and strategy of the real estate development in Ethiopia.
Throughout this module, about five major chapters are constituted and the module will help students to grasp knowledge, skills and attitude in order to help students gain the required knowledge, skills and attitude domains. The first chapter is designed to expose students to the nature of real estate development, the definition and nature of real estate development, Ground-Up Development versus Redevelopment real estate development, real estate demand and supply factors, the role of real estate in economic development and determinants/main factors of the real estate development
In the second chapter actors/stakeholders in real estate development Public and private investors in real estate Real estate developers and partners in Financial Institutions. The intention of the unit is to help students develop the basic knowledge of the real estate investment stakeholder’s participation in real property development in particular.
The third chapter deals with the real estate development process, real estate development appraisal/valuation, real estate development finance and real estate marketing. The intention of the unit is to help students develop the basic knowledge of the real estate development process, valuation and appraisal, the steps real estate development process e.t.c.
The fourth unit of the module deals with real estate development management, measurement of return on real estate developments, risk in real estate development and costs in the real estate development
The fifth unit addresses the environmental issues in the real estate development, the nature and practice of the real estate development in Ethiopia as well as policies and strategies and opportunities and threats.
Table of Contents
UNIT ONE
1. INTRODUCTION
1.2. Definition and nature of real estate development
1.3. Ground‐up development versus redevelopment development in real estate project
1.4. Real estate demand and supply factors
1.5. Importance of real estate on countries economic growth
1.6. Factors Influencing Real Estate Sector (Determinant of real estate)
UNIT TWO
2. ACTORS IN REAL ESTATE DEVELOPMENT
2.1. Introduction
2.2. Actors in Real Estate development process
2.3. Stakeholders in Real estate developers process
2.4. The Role of the Real Estate Developer
UNIT THREE
3. REAL ESTATE DEVELOPMENT PROCESS
3.1. Introduction
3.2. Real Estate Development
3.3. Real Estate Development Process
UNIT FOUR
4. REAL ESTATE DEVELOPMENT MANAGEMENT
4.1. Introduction
4.2. Definition of Real Estate Management
4.3. The importance of managing real estate development project
4.4. Who is the Property Manager?
4.5. Roles and responsibility of real estate managers:
4.6. Knowledge and skills required by a real estate project manager
4.7. Measuring of return on real estate development
4.8. The Idea of Real Estate development/investment/
4.9. Analysis Advatages and Disadvatages in Real Estate Ivestments/Development
4.10. Risks in Real Estate Development
4.11. Fees and taxes(costs) in real estate development
UNIT FIVE
5. ENVIRONMENTAL ISSUE IN REAL ESTATE DEVELOPMENT
5.1. INTRODUCTION
5.2. Environment
5.3. The practice of Polices, Strategies and laws in real estate development (investment)
5.4. Opportunities and threats in real estate development practice
Objectives and Topics
This textbook aims to provide undergraduate students with a foundational understanding of the real estate development lifecycle, including valuation, management systems, stakeholder participation, and the specific economic, legal, and environmental context of real estate development in Ethiopia.
- Fundamentals of real estate development and project life cycles.
- Stakeholder roles and management responsibilities in property development.
- Economic and financial aspects, including investment returns, demand and supply factors, and project costs.
- Risk management and legal/regulatory frameworks.
- Environmental sustainability principles and the nature of the industry in Ethiopia.
Excerpt from the Book
3.2. Real Estate Development
At its most basic, Real Estate Development is the business of facilitating the construction or reconstruction of buildings. This usually involves finding a piece of land, deciding what should be built on it, and then arranging and coordinating everything necessary to complete the project: financing, choosing and supervising the architect, contractor, sales or leasing agent, etc.
In most cases, the real estate developer is an entrepreneur, and takes significant financial risk to purchase the land and develop the property, only making money if at the end of the day the market values the finished property (by purchasing or renting it) for more than all the costs involved in developing it
There is a sequence of steps to follow from the first conceive a need of a real estate in a mind to the time of completion of the physical construction and until commence of ongoing asset management diagram.
Summary of Chapters
1. INTRODUCTION: This chapter introduces the nature of real estate development, differentiates between ground-up construction and redevelopment, and explores the economic drivers of demand and supply.
2. ACTORS IN REAL ESTATE DEVELOPMENT: This chapter identifies the various stakeholders involved in the development process, including public authorities, private investors, and financial institutions.
3. REAL ESTATE DEVELOPMENT PROCESS: This chapter details the multi-step lifecycle of real estate development, from initial conception to physical construction and long-term asset management.
4. REAL ESTATE DEVELOPMENT MANAGEMENT: This chapter focuses on the management of property assets, covering the roles of property managers, financial measurement of returns, and identification of project risks.
5. ENVIRONMENTAL ISSUE IN REAL ESTATE DEVELOPMENT: This chapter addresses sustainable building practices, environmental regulations, and the unique landscape of real estate development policy in Ethiopia.
Keywords
Real Estate Development, Property Management, Investment Valuation, Ground-up Development, Redevelopment, Stakeholders, Real Estate Finance, Market Trends, Sustainability, Construction Management, Infrastructure, Ethiopia, Asset Management, Risk Assessment, ROI.
Frequently Asked Questions
What is the core focus of this textbook?
The textbook provides a comprehensive guide to real estate development, covering processes, management, finance, and policy, specifically tailored for undergraduate students at Dire Dawa University.
What are the central themes of the work?
Key themes include the sequential phases of development, the roles of various actors, financial modeling, management of assets, and the integration of sustainable environmental practices.
What is the primary objective of this module?
The primary goal is to enable learners to gain fundamental knowledge in real estate development, including site appraisal, valuation techniques, and management strategies to make successful investment decisions.
Which scientific methods are employed for valuation?
The book details various methods, primarily the residual valuation approach, alongside return-on-investment calculations and discounted cashflow analysis for more sophisticated project assessment.
What topics are covered in the management section?
The management section covers the duties of property managers, the importance of budget and risk management, tenant relations, and the calculation of rental rates and financial reporting.
How is the real estate sector characterized in the context of Ethiopia?
The book explores the evolution of the Ethiopian real estate market through different political eras, current policy frameworks, and the practical challenges of urban development and housing shortages.
How does the author categorize the risks in real estate development?
Risks are categorized into areas such as cost overruns, debt/financial risks, leasing risks, physical asset risks, entitlement risks, construction risks, market risks, and geographic-specific risks.
What is the "residual method" of valuation?
The residual method calculates the value of a development scheme by subtracting total estimated development costs and required profit from the gross development value.
- Quote paper
- Markos Belayhun (Author), 2020, Real Estate Development. Definition, Process and Management, Munich, GRIN Verlag, https://www.grin.com/document/1118918
