Our approach to risk management is founded on more than a decade of experience in planning and executing real estate developments. We have developed solutions to identify and manage key risk areas which include:
Excessive land purchase price
In addition to thoroughly researching publicly available information on property values and pricing trends, Brodmore specifically focuses on acquiring land whose total development costs can be covered by rental income from the completed project. In doing so we seek to maximise value on each investment.
Cost over-runs
While detailed planning is often the most practical means to contain the likelihood of a mismatch between budgeted construction costs and actual costs, we believe that a firm’s experience plays a significant part in minimizing the risk of cost over-runs. At Brodmore, we have developed an experience based approach to cost management which has helped us deliver numerous projects on time and within budget. For example Brodmore’s agreements with contractors include guarantees on construction costs in addition to financial penalties for missed completion deadlines. This is just one of many ways in which Brodmore ensures that we make the most effective use of our resources.
Sector wide risks
Brodmore has developed a deep understanding of the property classes and neighborhoods that are most susceptible to falling prices. We are acutely aware that the stronger the uptrend in some market segments, the more pronounced the possible price correction in the longer term. And while moderate price declines can often be an unavoidable and manageable risk, one of Brodmore’s core focus areas is the pursuit of developments that are most likely to be resistant to significant price deterioration.