Question selection of comparable properties. Market delineation Considering

Question 2(b)Assess market analysis required for the out-of-town retail development.-223284257175The seven step of market analysis:552893372470300-2269173125515Property productivity analysisIdentify which features of the proposed property development that affects productive capabilities and potential uses of the property. Those attributes can be physical, legal, or locational, and they will be the basis for the selection of comparable properties.Market delineationConsidering the potential types of property development possible, identify the market for the defined use or more than one market if the property has alternative uses.Forecast demandEconomic base analysis is the basis of the analysis of existing and anticipated market demand. Examine population and employment data to analyse and forecast demand. The scope of work required by the assignment as well as time and budgetary constraints will dictate to what extent demand-side variables must be investigated.

Competitive supply analysisMarginal demand is established through analysis of existing and anticipated supply of similar property developmentsEquilibrium or residual analysisInvestigates the interaction of supply and demand to determine if marginal demand exists and then makes predictions as to when the market will move out of equilibrium.Forecast subject captureComparing the productive attributes of the proposed property development to competing property developments, then estimation can be made of the market share the subject is likely to capture considering market conditions, demand, and competitive supply.Financial modellingConsider and model alternative development configurations with the emphasis placed on financial feasibility analysis. This will compare the productive attributes of the proposed property development to competing property developments, and then estimation can be made of the market share the subject is likely to capture considering market conditions, demand, and competitive supply.To forecast the demand for an existing or proposed regional retail development or a stand-alone retail shop in a high street at a specific site over a given period of say 5 or 10 years, the following steps can be undertaken. Property productivity analysis is the analysis of the legal, physical and locational attributes of the proposed retail centre and competing centres in or near its trade area focuses on current industry standards. Note that retail properties can become out-dated quickly as industry standards change.

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Particular attention must be given to the following attributes of the proposed property development site and improvements. For example: land-to-building area or plot ratio, building area, parking, frontage, visibility and signage, topography, services and utilities, landscaping, design and building layout, amenity features, store size, store depth, tenant mix and marketing. Locational factors are also extremely important for retail development.

The locational attributes that should be investigated include land uses and linkages with the surrounding community, site location in relationship to patterns of urban growth and proximity to competitive supply.Market delineation is an effective analytical tool for defining the primary and secondary catchment areas of a proposed retail development have assisted to define the potential market. The most commonly used techniques are catchment areas, in which preliminary catchment area boundaries are adjusted for the specific geographic, demographic and economic characteristics of the community; gravitational models, a variation of catchment area circles that takes into account the effects of competition; customer spotting, a more detailed form of catchment areas where actual customer addresses are surveyed to determine distances and linkages.Forecast demand by using the inferred analysis of retail demand may include study are economic base and city growth trends; citywide retail centre occupancy; competitive centre occupancy.

Fundamental demand for retail space requires further examination of market data including: overall population of the area; number of households; average household income; percentage of average household income spent on retail purchases; percentage of retail purchases typically made at retail development similar to the subject; percentage of purchases made at the retail development allocated to primary and secondary catchment areas; volume of sales per square metre of retail area required to support the subject; normal vacancy rate in the market. The estimates of inferred and fundamental demand can be reconciled with a ratio analysis of that area in which the current amount of occupied retail per square metre per person is compared to the future population forecast. The findings of these studies may be further adjusted to account for retail income from outside of that area and leakage of potential retail income to other areas.Competitive supply analysis as for other property types, an inventory of competitive retail space covers existing competitive properties; properties currently being developed; planned property developments for which building permits have been obtained and proposed property developments. To complete the analysis, the supply of competitive space is rated according to the size, access and location, quality of merchandise, reputation, rental rates, vacancy and tenant mix.

The analysis of competitive supply should yield estimates of the area in square metres of specific competition, the market rent the subject can expect to generate in the current market and a comparative ranking of the subject.Equilibrium or residual analysis is the difference between the amount of existing and anticipated retail space will be the estimate of additional space needed. Sales per square metre in individual retail stores may also indicate the performance level of an existing retail development, the centre’s share of the market and whether there is opportunity for expansion. This data may be used to check the reasonableness of the estimate of additional space demanded. If there is a current surplus of retail space, the forecast of market conditions may identify when in the future the available retail space will be absorbed and demand for additional retail space will be available.Forecast subject capture because retail concepts can change so quickly, subject capture is especially difficult to forecast for retail properties.

In addition to inferred analysis of historical capture rates of the subject and competitive properties, several fundamental methods can be used to support an estimate of subject capture are quantitative ratings of the proposed property development and its competition; the size-of-the-centre technique, in which the drawing power of a retail development is related to its size relative to competing retail development and ratio analysis, which is applied like the size-of-the-centre technique but segments demand to the subject property only.Financial modelling considers different retail development options using financial feasibility analysis. Consideration should be given to maximising the use of site and the overall property development.


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