PROPERTY MARKET DEFINITION: A FUNDAMENTAL PROBLEM

Increasingly, rigorous market research is being seen as a necessary prerequisite to the successful and profitable construction and disposal of property developments. Norton, for example, stresses that, with the demand for accommodation in most market sectors being already reasonably well met, only a thorough and detailed understanding of the market will ensure that new schemes compete with and complement existing developments rather than merely duplicating them. The penalties of inadequate market research are heavy: projects are difficult to finance because funders remain to be convinced that there is a demand for the floorspace proposed; completed developments stand vacant because the accommodation provided does not meet the design, site or location requirements of potential occupiers. Even in areas, such as Berkshire, with relatively healthy local economies and continuing demand for premises, record levels of vacant floorspace, much of it modern, exist alongside record rental levels. The property industry appears not to have absorbed this lesson. Cadman and Cleaveley suggest that too many development decisions have been taken on the basis of ‘hunches’ or ‘gut feeling’ or because a similar project has been successfully developed elsewhere, rather than being taken in the light of adequate market analysis. Consequently, it is suggested that the surveying profession needs to show much greater interest in property market research and analysis and this paper has been written in an attempt to widen discussion on the subject. The vehicle chosen is a consideration of the high technology market and, more specifically, the difficulties encountered in trying to define that market. It is hoped that a detailed rather than a generalised approach will better illustrate the practical advantages and limitations of market research. The particular market sector was chosen because science parks and high technology developments are cited by Cleaveley as specific examples of projects which have been built without the benefit of adequate market research.