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Chapter 9 Computer Technology Property Development (6 th Edition) Publisher: Routledge Authors: Professor R.G. Reed.

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Presentation on theme: "Chapter 9 Computer Technology Property Development (6 th Edition) Publisher: Routledge Authors: Professor R.G. Reed."— Presentation transcript:

1 Chapter 9 Computer Technology Property Development (6 th Edition) Publisher: Routledge Authors: Professor R.G. Reed and Dr S. Sims

2 9.1 INTRODUCTION The emergence of software packages designed to meet the full spectrum of property development requirements together with the increased portability of this technology means that the developer now has many tools available both ‘in office’ and ‘in the field’ to assist in the complex task of managing a development. Although most development appraisals start off as a fairly simple cost/benefit analysis, they inevitably become more complex due to the interaction between the individual elements within the scheme. Property development software provides the developer with the ability to model the consequences of foreseeable changes in different variables to enable contingencies to be built into the plan, thus reducing risk by ensuring that any 'knock-on' effect is taken into account. The financial analysis of a real estate development was substantially advanced in the late 20 th century with the widespread availability of computer hardware and software. Prior to these advancements, complex calculations over extended time value of money were undertaken using pen and paper. Arguably the single largest benefit is the ease of conducting a sensitivity adjustment if there is a change in any variable.

3 9.2 COMPUTER SPREADSHEETS A spreadsheet (e.g. Microsoft Excel) still remains the most suitable software package available for examining a real estate development due to the widespread use of electronic spreadsheets. The property profession now has a choice of spreadsheet-based software specifically tailored towards the property industry, depending on whether the focus is on management or development. For the developer some computer software offers a spreadsheet with a standardised format that can be adapted for a range of different development projects. These programs are designed for ease of use and require minimal user training. The flexibility of such programs means that it is an ideal tool for tracking changes or scoping out the viability of a development.

4 9.3 PROPERTY DEVELOPMENT APPRAISAL SOFTWARE There are specialised software packages available which are specifically designed for development appraisal. These programs can be used for valuing residential, commercial and mixed use building plots in addition to managing the project costs once a development has commenced. This type of software can be used when obtaining bank finance or managing development costs, income and profit. EXAMPLE 1: Estate Master DF calculates key investment performance indicators, such as Residual Land Value, Profit, Margin, Net Present Value (NPV) and Internal Rate of Return (IRR). The user can also conduct multi- option scenario analysis to achieve the best financial outcome for their development site. EXAMPLE 2: Caldes Development Software is a property development appraisal software program. The software is used by developers, banks, funds, agents and surveyors for valuing developments, land and building plots. The software can be used for appraising residential, commercial and mixed use building plots/sites. Once a project is on-site then it can also be used to manage the on-going project and view budget against actual figures.

5 9.4 PROPERTY MANAGEMENT SOFTWARE Some software packages have the ability to support the management of the entire development process by helping to plan, organise, and manage resource pools and develop resource estimates for any given development. Project management software packages requires the developer to break down the individual stages of the development process and enter this information into a spreadsheet or interactive Gantt chart. This type of software is typically used throughout the scheme because it can adapt the entire development schedule in response to change, e.g. an unforeseen delay in the delivery of materials for a particular process. There are many available project management software packages in existence and their features will generally fall into two categories: those which focus on ‘Scheduling’ and those which provide ‘Information’ to the user/s. Scheduling tools are designed to sequence project activities by assigning dates and resources to each task. Information tools can also provide information to the developer, stakeholder or anyone else involved with the project.

6 9.5 (REAL) ESTATE AGENT, REALTOR OR LETTING AGENT SOFTWARE If a developer intends to manage the sale of the completed development then he should be familiar with at least one of the software systems that have been introduced into the property market. They are available as web or internet packages, often on a monthly subscription, or can be installed onto individual PCs or servers. 9.6 3D MODELLING/DESIGN SOFTWARE Recent software developments have focused on 3D modelling and it is now possible for a developer or project manager, with limited knowledge of 3D drawing software, to create a model of a prospective development very easily. The developer can upload an ordnance survey map or aerial image of the site they wish to develop and produce an accurate 3D model of the proposed development. The benefit to the developer is that any number of development options can be explored before the architect is called in to draw up the plans.

7 9.7 4D MODELLING This type of modelling is now widely used in the construction industry, for example linking a project portfolio management program to a BIM model to facilitate construction scheduling. Linking with geographic information systems (GIS) will assist to understand change that has already occurred and to enable predictive modelling of future trends. 9.8 MOBILE COMPUTING The use of laptops, tablets and smart phones and associated high speed technology allows property developers and professionals to be more productive. It is possible to obtain obtain current real estate information by accessing multiple listing services, either from home, office or car when out in the built environment.

8 9.9 EMERGING TECHNOLOGIES FOR PROPERTY DEVELOPMENT Building Information Model (BIM) is a digital representation of physical and functional characteristics of a development or building. It provides a shared knowledge resource for information about a development and forms a reliable basis for decisions during its life-cycle (from cradle to grave), BIM can be used to produce virtual 3D models from 2D architect’s drawings to help understand how a development will function when complete. Benefits to clients include a better understanding of energy use, building maintenance and informed decision-making processes. Benefits to developers includes closer scrutiny of purchases, reduction in human error in design vs. construction and reduced information requests. BIM and 3D laser scanning have offered new opportunities for capturing, mapping and analysing building information. The integration of BIM and 3D laser scanning is likely to provide a significant change in the accuracy and speediness of building surveying in contrast to conventional surveying techniques.

9 9.10 FUTURE TRENDS Emerging technology is focusing on developing ways to link data from different sources together so that it becomes more useful. Since the adoption of BIM by the construction industry, new programs are being developed to combine BIM with other programs. Combining such data presents significant challenges that need to be overcome. 9.11 SOFTWARE PACKAGE OPTIONS Software can be expensive although arguably any outlay in purchasing or using this type of software is recovered through improvements in efficiency, thus reducing financial outlay during the development process. Each developer will have their own system requirements and there are a number of different options available from access to a web-based program to installation onto a desktop PC or laptop.

10 Chapter 9 Computer Technology Property Development (6 th Edition) Publisher: Routledge Authors: Professor R.G. Reed and Dr S. Sims

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