Property development: Knowledge hub

Summary

Property development is a complex process of coordinating a range of activities to transform plans for built assets into physical reality. As a business process, it involves the financing, construction, renovation or refurbishment of buildings and land in order to make a profit.

This knowledge hub brings together key guidance, definitions, legislation, case studies, and innovations related to property development. Whether you're an architect, engineer, project manager or student, this is your starting point for understanding and applying best practice.

What is property development?

Property development is the process of creating new value from land or existing buildings. It covers everything from buying land, securing planning permission, designing buildings, managing construction, and eventually selling or renting out the finished development. This could include homes, offices, shops, industrial spaces and so on.

Property development is a much wider process than construction, which is principally the building of something such as a house, tunnel, bridge, etc. However, developers often manage the construction process as part of the overall development.

The development process can be summarised as:

• Initiation and evaluation.
• Land and property acquisition.
• Design and permissions.
• Construction.
• Management or disposal.

The key phase is deciding the nature of the development to be undertaken and whether or not to proceed with it. These decisions are based on an evaluation of the market, and financial appraisal of the proposed development, including the likely constraints, risks and profit.

Development evaluation requires assessment of a great number of criteria; funding can be difficult to secure, purchases and sales can take considerable time, and developments can require a great deal of management.

Why does property development matter?

In 2023, Real-estate activities generated £266 billion—about 13 % of UK GVA.

Property development is far more than just putting up buildings. It is a multi-disciplinary process that shapes where and how people live and work, channels billions into the economy, and is pivotal to meeting key challenges such as tackling the housing shortage and net-zero carbon transition.The quality, quantity and sustainability of future UK development will therefore have lasting impacts on social equity, regional prosperity, and the climate.

Property development is also part of the investment landscape; many pension funds, insurers and sovereign-wealth funds view property as a stable inflation-hedge.

Key articles about property development

Here are some of the most important and widely read articles about property development available on Designing Buildings:

• Business case for construction projects. Explains how to build a compelling justification for a project by aligning strategic objectives, costs, benefits, risks, and success criteria.
• Capital costs for construction projects. Outlines the one-off expenditures needed to acquire, develop, and commission a building, excluding ongoing operational costs.
• Cost. Defines cost in construction, exploring the different types (direct, indirect, fixed, variable) and its impact on project control and decision-making.
• Cost-benefit analysis in construction. Describes how to compare the monetary value of benefits and costs over time to determine whether a construction initiative is economically worth pursuing.
• Developer. Covers the role of a developer as the principal in sourcing land, arranging finance, managing planning and design, and delivering or financing built assets.
• Development. Defines development broadly as the process of land use change or building works that require planning permission, including its types and regulatory context.
• Development appraisal. Explains how developers research site constraints and opportunities—covering location, legal, planning, physical and financial factors—to decide whether a project is viable.
• Development manager. Explains the specialist who oversees development projects on behalf of landowners or investors, coordinating consultants, contractors, finance, and risk.
• Discounting for construction projects. Examines how future costs and revenues are adjusted to present value using discount rates to support appraisal and comparison of investment options.
• Due diligence. Details the investigations carried out—legal, financial, technical, and environmental—before acquiring a site or committing to a development project.
• Equity and loan capital for property development. Discusses the combination of investor equity and lender debt used to structure financing for developments, including return expectations and risk-sharing.
• Existing use value. Defines what land/property is worth in its current use, which serves as the baseline in residual valuation and is contrasted with hope value.
• Funding options for building developments. Provides an overview of the various financial sources available for development, from traditional bank loans to mezzanine debt and public funding.
• Glossary of property law terms. Offers clear definitions of essential legal terms in property law, such as easements, covenants, leasehold, freehold, and title.
• Gross development value. Defines GDV, how it’s estimated (e.g., market survey, comparables), and how it feeds into residual appraisals and design decisions.
• Initial cost appraisal for design and construction. Explains how early project costs are estimated using benchmarks, rates, site information and procurement strategy before final design is complete.
• Internal rate of return for property development. Outlines how IRR is calculated from cash-flows to assess if a project meets a developer’s required return above cost of capital.
• Investment property. Describes property held or developed specifically to generate rental income or capital growth for investors.
• Land value. Explores factors influencing land value—size, location, shape, permitted use classification—and its role in determining viability through appraisal.
• Life cycle assessment. Introduces the method of assessing the environmental impacts of a building over its entire life—from material extraction through to demolition.
• Net present value. Defines how NPV is calculated by discounting future cash flows to assess whether a project creates value above its cost of capital.
• Options appraisals for construction projects. Describes this early appraisal stage where multiple design/usage options are compared on cost, risk and feasibility before selecting a preferred scheme.
• Property. Offers a broad overview of the concept of real estate, including land, buildings, and rights associated with private and public interests.
• Property development finance. Covers the specialised lending products, risk considerations, and funding structures used to acquire land and pay for construction.
• Property law. Knowledge hub and links to key articles about property law on Designing Buildings.
• Property ownership. Explains different forms of holding real estate—freehold, leasehold, shared ownership—and their implications for rights and obligations.
• Property rights. Defines legal entitlements attached to real estate, such as exclusive possession, access rights, and third-party interests like easements.
• Property valuation. Describes how properties are valued using methods such as comparable evidence, income yield, and cost approach in development contexts.
• Real estate investment trust REIT. Explains REITs as tax-efficient listed vehicles that own and operate income-generating real estate on behalf of investors.
• Residual valuation of land. Describes the core appraisal method used to calculate land value by working backwards from projected revenues (e.g., GDV) minus costs, with sensitivity analysis and risk allocation.
• Site appraisal for construction. Explains how architects and developers evaluate land using factors like topography, access, legal/planning constraints, and environmental issues to determine whether a site is suitable for development.
• Site selection and acquisition for construction. Covers how developers identify, assess, negotiate, and acquire sites based on planning, market, technical and financial suitability.
• Speculative construction. Describes projects delivered in advance of customer commitments, with developers assuming the risk of leasing or selling afterwards.
• Sustainable development. Outlines how construction can meet current needs while protecting the environment and social well-being for future generations, following frameworks like the UN SDGs.
• Types of built development. Surveys categories of physical assets—residential, commercial, industrial, infrastructure—and their distinct planning and delivery challenges.
• Yield. Defines yield as the ratio of rental income to asset value, used to benchmark returns and capitalisation rates in investment appraisals.

All articles about property development

There are more that 700 articles about property development on Designing Buildings. A full index is available here.

You can access our other subject-specific knowledge hubs here.

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