A Glimpse Of The Pre-opening Work Flow Of Real Estate Development

The article elaborates the current situation of the development of commercial real estate. The growth of residential development is stagnant due to Government policies and developers start to divert their resources to commercial real estate to cope with the situation and fully exploit the forthcoming opportunities generated by the massive urbanization process.On the other hand, the development of commercial estate in China is still immature and encounters problems such as insufficient capital cash flow, architectural deficiencies, unrealistic construction schedule, product positioning which all these problems constitute a huge risk for developers.In the article, we have outlined three stages namely1) research and Planning2) Pre-opening Development and3) Operations which scope involves detailed research to provide a clear picture to define the the asset positioning, financial and human resources planning to lay down a solid foundation for the development of the commercial asset.In our case study of the development of协信Group from1996to2005, we think it would be a classic example of failure due to1)ignore market demands2) lack of proper human resources3) deficiency of financial planning and cash flow4) underestimate the impact of hardware on the future positioning and5) lack of proper management team and preparation. The inevitable outcome of these5syndromes was the operating loss and the worst scenario may be so serious that the Group may suffer from bankruptcy.From this actual case study and throughout a detailed analysis, we conclude that the pre-requisite of a successful commercial real estate development is a proper pre-opening research covers1) market momentum2) define business model3) architectural design4) liquidation channels and5) human resources and development and recruit a professional third party company to manage the asset. Only with all these elements in place, a commercial asset would be on the right track.