The perception and management of risk in UK office property development

Fisher, Peter and Robson, Simon (2006) The perception and management of risk in UK office property development. Journal of Property Research, 23 (2). pp. 135-162. ISSN 0959-9916

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Official URL: http://dx.doi.org/10.1080/09599910600800484

Abstract

Risk is an ever-present aspect of business, and risk taking is necessary for profit and economic progress. Speculative property development is popularly perceived as a 'risky business' yet, like other entrepreneurs, developers have opportunities to manage the risks they face; techniques include phasing and joint ventures. The associated areas of investment portfolio risk, development risk analysis and construction risk management have all been addressed by research. This article presents new knowledge about how developers perceive risks and the means they subsequently adopt to manage them. The developers of office projects across the UK were sent questionnaires by post. Respondents were asked about their perceptions of risks at the first appraisal stage and currently and about the risk management techniques that they had adopted. In-depth interviews with a selection of respondents were then used to discuss and augment the findings. Developers were most concerned about market-based risks at both stages. Concern about production-orientated risks was lower and fell significantly between the two stages. A fixed price contract was the most common risk management technique. Risk management techniques were used more often outside London and the South East. Developer type affects both the perception and management of risk. While developers do manage risk, decisions are made on the basis of professional and business experience. These findings should help development companies manage risk in a more objective and analytical way.

Item Type: Article
Uncontrolled Keywords: real estate development, risk management
Subjects: K900 Others in Architecture, Building and Planning
Department: Faculties > Engineering and Environment > Architecture and Built Environment
Related URLs:
Depositing User: EPrint Services
Date Deposited: 24 Oct 2008 12:54
Last Modified: 08 May 2017 11:56
URI: http://nrl.northumbria.ac.uk/id/eprint/3753

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