- Investment Project Management (Fee-Development)
One of the modern directions of economic development and management of enterprises in the investment and construction sector is the problem of applying the scientific and practical concept of development.
The term «development» is borrowed from the English language and literally means development, growth. In world economic practice, it is used to denote activities aimed at increasing the value of an object through its qualitative changes.
The most common are two types of development: fi-development and speculative development.
Fi-development is a type of construction business in which the development company is not the owner of the property being built, the development company is engaged in clean development, without investment functions, without maintaining the partially constructed property on the balance sheet. The fi-development company carries fewer risks; it is not interested in speculating on the area built with square meters.
In the west, fi-development companies occupy a significant market share, making it possible to effectively separate the functions of the building owner — he is most often the investor — and the construction agent. Such companies have a staff of architects, designers, specialists in investor relations, construction specialists — engineers and foremen.
Of course, the level of confidence in the market should be high, only the best fi-development teams can count on participation in the Russian market. Fi-development involves quality control of the construction of the facility, the search and conclusion of contracts with contractors. Fi-developer is a general contractor and customer service in one execution.
Classical development in the modern Russian construction market determines the mandatory participation of developer money in the investment and construction process.
The percentage of participation of a construction company in market projects ranges from full in the amount of 100% to a minimum of 35-40%. Only such proposals are of interest to land owners and investors.
In the near future, fi-development will become the leading principle in building relations between builders and investors. FI-developer companies in the Russian market perform the functions of a customer-developer with financial authority.
In the general case, the investment and construction process is a logical sequence of stages of the investment project, which can be narrowed to nine main positions:
1) the emergence of an investment plan;
2) availability of funding opportunities;
3) business planning;
4) organization of investment project management;
6) supply of equipment and materials;
The second type of development is speculative development.
Speculative development (Speculative development) is more complex than fidelopment. The developer builds commercial real estate, acting with full responsibility as the organizer of the project.
The financial scheme of large development projects is a complex combination of the developer’s own funds and attracted investments — bank loans and payments from future tenants.
A sufficiently high profit in the framework of speculative development is accompanied by high risks in case of failure of the project, and these risks are borne by the developer. Speculative development is the most complex form of relations between participants in the investment process in the real estate market, because in one project real estate, construction, design, and very complex banking operations are combined.
In the Russian practice of the investment and construction business, the terminology of land development is more and more updated. Land development is a highly profitable, very profitable and attractive land investment business. This is not just a purchase — the sale of a land plot, it is a whole process that includes, firstly, the acquisition of the most suitable and attractive land plot, and secondly, it is necessary to carefully develop an investment project that matches the project and a general concept.
The disaggregation of land is the main mechanism of development, in the framework of which it is prepared, as a rule, in three stages:
1) work with unprepared land;
2) turning unprepared land into semi-prepared land with roads and utilities connected to the boundaries of the plots;
3) direct downsizing of land.
This sequence is usually characteristic for the development of large free territories. When performing smaller-scale projects, as well as with point-building and redevelopment, the second stage is skipped.
The process of converting unprepared land into semi-prepared land in different regions occurs differently, depending on the form of land ownership, the capabilities of local developers and financial institutions, as well as the institutional capacity for laying roads and utilities.