10 Real Estate Development Strategies for 2024

Investing in real estate in 2024 requires a blend of forward-thinking strategies, ability to cope with the changing environment, and acceptance of existing technologies.

Shaped by the advancements in technology and economic changes, successful investors are those who utilize property technology (PropTech) and data analysis while also finding hidden opportunities and enhancing operational efficiency.

The growing number of people searching for properties online, wherein 47% of home buyers start their search, emphasizes how important digital platforms are in real estate. This trend is likely to keep getting stronger, showing why it is crucial and necessary for real estate experts to create strong online marketing plans.

What is the Future of Real Estate?

Between 2025 and 2028, following a notable rise from 2021 to 2023, home prices are anticipated to increase at a slower rate, roughly one percentage point above the inflation rate. This indicates an expected rise of around 13% to 14% from the levels recorded in 2023 asreported by US News Real Estate.

Adapting to these shifts is essential, not just a choice, for those aiming to succeed in the real estate industry. Here are  the curated list of 10 Real Estate Development Strategies for 2024:

1. Exploration of other Permitted Development Rights

Following changes to general permitted development rights in England, investors and developers can add new floors to existing buildings without full planning approval. This applies to buildings under Class A, AA, & AB, provided that they are not controlled by residents.

Prior approval is necessary, and there are various considerations:

• This applies exclusively to England.
• Airspace PD rights necessitate prior approval for factors like transportation impact and contamination risks.
• Considerations include the external appearance of the building, provision of natural light, and impact on neighboring premises’ amenities.

Pro tip: Consider airspace conversion for experienced developers, and consult planning advisors for guidance on the best PD rights to utilize.

2. Embrace Co-working Offices

With the growing preference for remote work, there is an increased demand for local co-working spaces. Setting up such operations offers flexibility, either by leasing to a co-working operator or managing the space independently.

Pro tip: Consider financing options carefully, as banks may prefer leased commercial units for refinancing.

3. Redevelopment of Low-Value Properties in High-Value Areas

Repurposing existing commercial properties in affluent residential areas can lead to higher returns. For instance, converting garages and workshops into commercial or mixed-use spaces under permitted development.

Pro tip: Utilize tools like Elite+ from Nimbus Maps to identify properties suitable for redevelopment quickly.

4. Focus on Industrial Properties

The surge in eCommerce has boosted demand for industrial properties, particularly for small, flexible spaces in urban areas. While this sector offers promising opportunities, it is essential to note:

• The current market may see distressed sellers, presenting favorable purchasing conditions.
• Splitting larger units into smaller ones could yield higher rental returns.
• Conduct thorough market research to gauge demand and supply dynamics.

Pro tip: Collaborate with commercial agents to assess demand and rental potential accurately.

5. Seize Opportunities in Distressed Properties

The post-pandemic landscape may lead to an increase in distressed properties as landlords face challenges. Engaging with distressed vendors ethically can yield mutually beneficial outcomes.

Pro tip: Incorporate the ending of the Tenant Eviction Ban into your marketing strategy to identify distressed sellers effectively.

6. Conversion of Commercial (Class E) to Residential

Class MA (Mercantile to Abode) represents a significant change to Permitted Development rights, allowing most properties under Use Class E to be converted into residential units.

This presents substantial potential for repurposing commercial buildings such as shops, restaurants, offices, and more.

However, there are some limitations to consider:

• This applies only to England; planning permission is required for projects outside England.
• The conversion is applicable to Class E uses, with a maximum conversion area of 1,500 sqm.
• Minimum space standards apply, including the provision of natural light in habitable rooms.
• Not available for listed buildings, but can be used in conservation areas.
• Commercial units must have been in Class E use for two years, with the building vacant for three months before the application.
• A 57-day prior approval period is required for various considerations, including transportation, contamination, and noise impact.

Pro tip: Prioritize thorough research and engage professionals familiar with Class MA regulations to ensure compliance and maximize the viability of commercial property conversions into residential units in England.

7. Focus on Retail and Leisure

Despite challenges, there is  a resurgence in demand for experiential retail and leisure offerings. Businesses offering unique experiences are likely to thrive, while startups benefit from lower entry costs.

Pro tip: Analyze footfall, local demographics, and deprivation indexes to assess the suitability of an area for retail development.

8. Explore Sale and Leaseback Arrangements

Businesses seeking to free up capital may opt for sale and leaseback arrangements. Identifying such opportunities and engaging in direct-to-vendor marketing can lead to lucrative deals.

Pro tip: Leverage online platforms and networking to identify sale and leaseback opportunities efficiently.

9. Prioritize Sustainability

With the increasing concern  on climate change, sustainable developments present significant opportunities. Incorporating renewable energy and achieving carbon neutrality can attract tenants and investors.

Pro tip: Highlight the importance of sustainability in your marketing efforts to attract environmentally conscious vendors and investors.

10. Optimize Asset Management

Improving asset management strategies can enhance the value of commercial properties. This includes actions like leasing vacant properties, changing property use to increase value, and restructuring leases for better terms.

Pro tip: Target properties with short leases for potential value uplift through lease extensions or renegotiation.

RE Design Your Partner in Real Estate Success

Discover innovative real estate development strategies for 2024 with RE Design. We offer comprehensive solutions to elevate your projects, from investment ideas to property designs and remodeling. Contact us today to transform your vision into reality. 

Final Thoughts

Investing in real estate in 2024 demands foresight, adaptability, and tech savvy. Successful investors embrace Property Technology (PropTech) and data analysis, seizing hidden opportunities and optimizing operations. 

With nearly half of home buyers starting their search online, making it available to various digital platforms is crucial. Adapting to these trends is essential for success.

Futuristic thinking of innovation and growth in real estate development, where technological integration, online presence, adaptability, and a positive outlook shape the landscape.

FAQS

What does ‘real estate strategy’ mean?

Successful investors have a clear real estate business strategy with both short and long-term goals. Essentially, they’ve created a roadmap to reach their destination, showing not only the easiest path but also pointing out possible challenges ahead.

What influences real estate development strategies?

Influences on real estate development strategies include tax rates, the local business climate, government regulations, demographics, nearby amenities, and the cost of living. It is  also crucial to consider the broader macroeconomic landscape when making real estate decisions.

How do market trends affect these strategies?

By keeping an eye on these trends, businesses can predict changes, make well-informed choices, and adjust their strategies accordingly. This is achieved through conducting market research and implementing changes based on collected data.

How do you handle risk in real estate?

To handle market risk, it’s important to thoroughly research before purchasing a property, spread out your investments across various areas and types of properties, and keep a close watch on market trends. It’s also wise to have a backup plan and sufficient savings to handle any unexpected drops in the market or vacancies