![]()
Introduction
Introducing international approaches to real estate development
Graham Squires and Erwin Heurkens
Introduction
Real estate development is a significant factor in shaping the built environment. It shapes the way people live and work, and by doing so determines and enables human activity to evolve. Around the globe, real estate development forms a contemporary reflection of societal needs and market demand of particular geographies. Nonetheless, due to globalization we increasingly witness similar needs and demands for space despite institutional differences existing between countries and cities. These intriguing notions ask for a better understanding of the real estate development phenomenon in all its complexity. This chapter introduces the prospect of a new possibility for the study of real estate development on an international scale to enhance both knowledge and understanding.
The bookās aim primarily is to enhance the depth of learning, plus encourage a stronger professionalization of practice and policy in the built and natural environment. First, there is an introduction of the key focus on āinternationalā and ācomparativeā elements of real estate development. This is followed, second, by the structure and themes covered in this book that enrich our conception of real estate development. Third, a justification of the selection of national real estate development practices covered in this book is given. Fourth, the challenge of comparing and understanding real estate development on a global scale is met by introducing some key methodological concepts and theories in comparative international real estate development. Fifth, on the basis of these findings a new conceptual model for comparing and understanding real estate development is constructed. A summary and prospects for the book will then provide a conclusion to the chapter.
Introducing an international comparative approach to real estate development
It is widely acknowledged that, in many development practices around the globe property investment in urban development has changed radically as a result of the global financial crisis (GFC) and economic downturn (Parkinson et al., 2009; PwC and ULI, 2012; Ball, 2010). For instance, the current economic climate and liquidity position of developers puts real estate in an entirely new spotlight. This new landscape seems to be a shared challenge in all real estate development practices. This increases the relevancy of drawing lessons from other contexts, thereby taking into account the limitations of specific context-dependent institutional characteristics.
Methodologically, if context is everything, can a comparative approach produce any meaningful contribution? For research in real estate, focusing on the principles of real estate markets (e.g. Dent et al., 2012), real estate development (e.g. Miles et al., 2007; Peiser and Hamilton, 2012), and real estate finance and investment (e.g. Brueggeman and Fisher, 2010) are often geographically bounded and/or specific to a real estate sector or market. Hence, to a certain degree these studies lack full potential to explain and comprehend the interdependency, complexity and challenges of real estate development. Adams and Tiesdell (2012) provide a thorough conceptual overview of real estate development characteristics in relation to spatial planning on an urban scale ā although these matters are not comparatively drawn.
However, in a globalizing world, it seems appropriate for scholars and practitioners to obtain a better understanding by comparing the various international real estate development contexts they wish to study or work in (Barkham, 2012). An institutional approach to international real estate has been one such leap to comparatively examine some aspects of development in different geographical contexts (Seabrooke et al., 2004). This may help to move beyond technocratic real estate valuation and appraisal methods, towards a wider understanding of how the conditions for real estate development become effective in different markets. Moreover, in the light of the enduring economic stagnation in Western countries, there seems to be an increased need for and interest in new perspectives and insights from successful foreign real estate development practices, as valuable lessons might be drawn from them.
Nevertheless, such a comparative international perspective on real estate development provides some research challenges in terms of methodology and concepts. Therefore, first, this chapter examines the methodological challenges of international comparative and lesson-drawing research (Rose, 1991). Second, it provides a comparative model containing various characteristics and criteria by which different real estate development contexts in countries all over the world can be compared. This will enable a framework in the conclusion chapter to illustrate the applicability and limitations of such comparative models by using the chapter examples of international real estate development practices. A valid conceptual model to compare international approaches to real estate development is certainly something that is new and innovative to learning.
The objectives of the book can be broken down into four main categories (Table 1.1). The first category is to comprehend the interdependency, complexity, and challenges of Real Estate Development. This could be, for instance, in practice where practitioners and policymakers need a better understanding of their role as interdependent stakeholders that operate in an increasingly complex and challenging system that requires mutual understanding even if their own interests are at odds. A second objective is more conceptual and involves obtaining insight into how real estate development concepts travel across borders and the way they materialize in different contexts. The third overarching objective is to add comparative insights to the rich body of knowledge in the academic field of real estate and property development. Lastly, the book aims to fulfil the need for an interest in new perspectives from real estate development practices by drawing inspirational and transferable lessons for scholars and practitioners.
Table 1.1 The four objectives of the book | 1 Comprehend interdependency, complexity, challenges of real estate development |
| 2 Obtain a better understanding of how concepts for real estate development become effective in different contexts (e.g. market models the same for instance) |
| 3 Obtain a better understanding by comparing various international real estate development contexts (comparative studies) |
| 4 Increased need for and interest in new perspectives and insights from successful real estate development practices (lesson-drawing) |
Source: authors.
Comparative themes covered
The chapter structure of this book is based on the real estate development case-study context of a nation or nations. The scope of each chapter is largely open to the key research interests of the author and what they feel is important within their case study to do justice to the contextual variety and richness of cases. To retain an element of comparative analysis and discussion of case-study examples, specific parameters are kept with regards to real estate development; the following five key themes are of primary focus:
1 Broad philosophy and approach to real estate development.
2 Characteristics and mechanisms involved in real estate development.
3 Geographies and spatial patterns in real estate development.
4 Implementation and partnerships in real estate development.
5 Outcomes and critiques of real estate development.
Although not completely restricted to each theme, every one of them handles some specific context-dependent features of real estate development. First, the broad philosophy and approach covers the contextual environment in which real estate development takes place. Features of this theme include rules and perceptions such as those in political, social, economic and legal institutions. Second, the characteristics and mechanisms involve a specification and clarification of real estate development markets and models. For instance, choices are made to describe the market supply and demand prospects and finance opportunities of residential, commercial and/or industrial real estate along with the legal and conventional aspects of real estate development, such as property rights and land use management. Third, the geographies and spatial patterns theme illustrates the materialization and distribution of real estate development, sometimes in relation to other physical aspects of the built environment such as infrastructure development. Fourth, the implementation and partnerships section holds the possibility of interpreting the physical appearance of real estate development. This can be done by explaining the role of (partnerships between) key public, private and civil agencies and meaningful events related to the different stages of the development process of a particular real estate project. Fifth, in order to enable readers to judge particular practices, the outcomes of real estate development on various scales and aspects are supported by critiques provided by the authors.
Justification of national case studies
With over 196 countries recognized by the United Nations (UN) a complete national compilation of real estate development would be too large and difficult within this first edition. Furthermore, it is recognized that each national selection does not cover the intricate details of real estate development issues ranging from individual site, to the city, regional and national strategic level. However, the selection of nationalities covering all continents and regions on the globe attempt to begin to illuminate and add insight to key issues that are experienced in both their similarities and their differences. The āall for one, and one for allā approach is put forward, where several national case-study issues may share a similar trait, whilst simultaneously a single national case study may provide a unique set of issues that can be a lesson to other real estate development practices.
The specific national examples are covered in Table 1.2. All continents are covered (except Antarctica) to demonstrate insight, however slight, in order to begin to formulate and conceive comparative real estate development issues. Further classification at this point, such as dividing them into developed or developing countries, seems to go beyond comparison as it surpasses the fact that such classification is highly arbitrary and time-constrained.
There are a number of reasons for selecting these national case studies of interest to the reader. Prosperous European countries like the UK and the Netherlands have been chosen to reflect the current debate on the implications of increased involvement of the private sector in delivering real estate develo...
