07 Sep Mitigating Risks on a Development Project
Before approaching a development, it is important to consider which factors need to be considered to ensure that the project will see a successful completion. Take a look at some of the key factors selected by Stuart Sherwood, Associate and Head of Development Monitoring at Edward Cooper Young Chartered Surveyors.
Select the Right Project Team
It is so important to get the right advice as early as possible. Whether you are a seasoned developer or relatively inexperienced, there will be a requirement to engage the services of other professionals (Architect, Structural Engineer, Planning Consultants, Project Manager etc). It is important to deploy a team with a track record and suitable experience who will understand the project brief. For the inexperienced, seeking professional advice early on can also help to indicate whether other professionals should be engaged at any stage of the project. In addition, professionals provide valuable input early on which can save time and reduce costs in expensive learning curves already experienced by others.
Selecting the Right Form of Procurement
There are many different ways to deliver a project. However, not every project is suited to all forms of procurement. When we talk about procurement it is the strategy for how the development is going to be undertaken and delivered. This could be by tendering to the market via a ‘traditional route’ (design-bid-build) or perhaps design and build, to a Main Contractor. Another example could be engaging the services of a construction manager to procure the individual trade packages. It is therefore important to consider and understand the most effective procurement route for the project.
Different forms of procurement have different risks which should be weighed and assessed in the early stages. Again, the best way to understand this would be to engage professional services for guidance early on what form of procurement best suits the project brief and requirements. It’s also important to note that each procurement route has its own documentation (contract etc). It is important to ensure that these are in place and are suitably robust.
Undertake your own due diligence
Aside from the lender’s due diligence which we will discuss in a follow up article, undertaking your own due diligence is important for any development. It provides you with the confidence that the project will come to a successful conclusion. Independent due diligence can include the following points as an example:
For an existing building, it is a good idea to conduct a structural survey to confirm the suitability of the buildings structure for the scheme. An asbestos survey could also be a good idea to confirm the scope of any asbestos within the building.
For a new build scheme, I would recommend undertaking an intrusive site investigation to confirm the best foundation design (both the most design and cost appropriate) and whether the site is contaminated.
Reviewing these and wider points will assist in highlighting additional time and cost requirements. There are also many other different aspects which should be considered. Thorough due diligence ensures that you are able to attain a good understanding of the risks associated with the site and getting to grips with them will indicate how those risks can be mitigated and/or managed appropriately.