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Case Study: Housing
Changing the concept of a residential complex
Task
A major developer of comfort-class residential real estate in Moscow was designing a concept for a new development in the city's Southern Administrative Division. Based on previous experience and a strong history of project implementation, the company had been invited to build a residential complex of standard type: modern panel-built apartment blocks with a traditional set of social and commercial infrastructure on the ground floors.The land area and permitted housing density entailed construction of housing with total floor space of 140,000 sq m.
PROSPECTA created a financial model for the new project and suggested alternative scenarios for the future development. The land was close to a metro station and to Moscow's third ring road, offering rapid and easy access to the city centre. This was a good argument for higher positioning of the future real estate and for various other changes to the project.
PROSPECTA created a financial model for the new project and suggested alternative scenarios for the future development. The land was close to a metro station and to Moscow's third ring road, offering rapid and easy access to the city centre. This was a good argument for higher positioning of the future real estate and for various other changes to the project.
Process
Deeper analysis of local demand appeared necessary. We therefore designed and carried out surveys of local residents, which showed what type of living environment and infrastructure was most suited to their needs.
PROSPECTA specialists also performed a detailed analysis to establish whether nearby projects that had been recently completed or were under construction could already meet the needs of future residents. Analysis of sales in competing residential projects showed that those, which had been built without suitable business-class infrastructure were selling slowly, forcing developers to offer discounts. The research enabled design of several scenarios for the project development, offering various alternatives for housing class and for commercial and social infrastructure.
In a second stage of work PROSPECTA polled focus groups of residents in nearby districts who were planning to buy apartments in the future. The work with potential buyers helped to adjust the scenarios, after which the results were used to prepare a flexible financial model. Optimal project content and positioning will ensure that apartments sell more quickly than those of competitors.
PROSPECTA specialists also performed a detailed analysis to establish whether nearby projects that had been recently completed or were under construction could already meet the needs of future residents. Analysis of sales in competing residential projects showed that those, which had been built without suitable business-class infrastructure were selling slowly, forcing developers to offer discounts. The research enabled design of several scenarios for the project development, offering various alternatives for housing class and for commercial and social infrastructure.
In a second stage of work PROSPECTA polled focus groups of residents in nearby districts who were planning to buy apartments in the future. The work with potential buyers helped to adjust the scenarios, after which the results were used to prepare a flexible financial model. Optimal project content and positioning will ensure that apartments sell more quickly than those of competitors.
Result for the client
Based on the recommendations by PROSPECTA experts, the developer changed the class of the future complex from 'comfort' to 'business'. The detailed study made it possible to avoid including infrastructure in the project, which would not find demand. For example, the client decided against general-purpose space on lower floors in favour of modern commercial spaces in the substructure.
The PROSPECTA findings also helped the client to find alternatives to the traditional location of buildings in a micro-district and to offer modern architectural solutions. The detailed forecast of demand, based on study of competing projects, helped in preparing a realistic sales plan and optimal project phasing. The project was approved and successfully brought to market.
The PROSPECTA findings also helped the client to find alternatives to the traditional location of buildings in a micro-district and to offer modern architectural solutions. The detailed forecast of demand, based on study of competing projects, helped in preparing a realistic sales plan and optimal project phasing. The project was approved and successfully brought to market.