Because there is a leisure offer for every walk of life, commercial development is a dynamic discipline that puts strategic vision and creativity to the test. Each society and environment models different ways to enjoy free time. These formulas are never static, and companies specialized in this sector develop a powerful analytical capacity that allows them to identify the short, medium and long-term factors for success, and define projects capable of being maintained over time and adapting to new market needs.
In our experience as a resort management and real estate project development company, at Arum Group we have learned that successful residential communities are also linked to an interesting and sustainable leisure offer. In our years as consultants and developers, we have shaped residential, tourism and mixed destinations whose parts work together to attract both visitors and locals with extraordinary commercial and leisure facilities and dining.
These are a few of the principles that we view as key for any successful commercial development project:
1 – Commercial real estate development for multiple consumer profiles
2 – Choose top brands for your commercial property development
3 – Expect and promote change
4 – Commit to commercial development projects with a future
Commercial real estate development for multiple consumer profiles
Traditional commercial real estate development methodology tends to target a consumer niche. At times this has been taken even further, defining only one or two typical consumers for the product or service the commercial development will offer. However, our experience in a globalized and interconnected world has demonstrated that markets are much more complex, and so are the types of people that can demonstrate interest in the same leisure or residential product.
When planning a commercial real estate project, whether independent or as part of a larger development like a resort, potential consumers must be segmented in a variety of ways and all their needs analyzed. A robust analysis of Buyer Personas can reveal a wider range of interests than we believed existed among our core consumers, as well as identify other “satellite” consumers who can complement them and add great value to the project.
For example, in the planning of a golf resort, adding a Pro Shop might be a given. But depending on the type of resort in which the golf course is located, we should also take into account the needs of families, non-golfers, and people of varying ages. Perhaps the offer should also be complemented with a Kids’ Camp, or a fine dining offer, or a spa.
Regardless of the focus of the destination as a whole, in a mixed-use development we must keep in mind that there will always be both permanent and transient users. Someone who buys a residential property next to a commercial center, in a resort, or adjoining an amusement park will have different needs from a tourist attracted by a leisure, accommodation, or Food & Beverage offer. Responding to the needs of each type of client is the key to defining the elements of the offer and to planning and promoting them in the most strategic and profitable way possible.
Choose top brands for your commercial property development
If we want our commercial real estate offer to attract visitors on its own merits and become a source of revenue for the overall project, it must be treated as a priority investment. Whether it forms part of a residential community or a tourism complex, the commercial offer should leverage the best brands and top experts in the sector and have crystal-clear business objectives.
Hiring the best operators and managers and bringing reputed brands onboard is a way to ensure that the commercial property development is disseminated to the brands’ loyal customers. The signing of a reputed chef or the establishment of a Michelin-level dining establishment, for example, can set the tone and expectations for the rest of the development. It will also, in turn, attract other luxury or top brands who seek to associate themselves with exclusive projects.
In the sport arena, the same is true. Having name-brand academies or celebrity designers work on the project from the beginning is a way to automatically access your target market and communicate your project’s merits with authority. It is also an attraction in itself if deals can be secured by commercial property developers that bring first-class athletes to your development to train or offer workshops.
This logic, which can of course be extended to the management of all commercial spaces, is also a must when it comes to your commercial tenant search. The brands and level of exclusivity of your retail and service establishments will define the character of your commercial space and, by extension, the consumers you will attract.
Expect and promote change
In-depth knowledge of our consumers and constantly observing them should help us to understand trends in the sector and the changing needs and interests of clients. Moreover, it should encourage us to go further, designing experiences that are innovative and products that will surprising and stimulate our consumers. If there is a risk in planning a commercial real estate project, it is playing it safe and simply repeating “successful” formulas. In truth, these formulas are rarely exportable, and each new facility requires an implementation with a high degree of customization and innovation that fits the commercial real estate strategy.
When social and environmental sustainability are part of commercial developers’ core commitments, as they should be, packages of services and products should be flexible enough to work with the local economy. Commercial property development companies should carefully consider their F&B plans, for instance, in the context of local resources.
It is crucial that the project setting be considered and integrated into the commercial real estate business plan, but the project should also adapt over time with and to the local community. While this does imply a greater degree of active management and periodic revision of objectives and strategies, this should be taken as a positive. Change stimulates permanent residents and ignites the curiosity of visitors, giving them a reason to return to your development. It also deepens the bonds with the local community, and this is a crucial balance to strike.
Commit to commercial development projects with a future
Commercial real estate design and strategy standards have shifted substantially in recent times. Standardized formulas do not work and qualified investors flee from cut-and-paste developments, choosing instead to embrace projects that have a spirit of their own. In these developments, innovation has a solid planning foundation that guarantees long-term viability. And it’s not surprising that they are usually managed by innovative commercial real estate developers who go far beyond the bare minimum requirements.
Commercial development projects that are solid pay a great amount of attention to rental management, for instance, considering tenants to be a crucial part of the overall attraction. These tenants must not only be chosen carefully, but also taken care of to ensure their longevity as part of a complex. Top commercial real estate developers will also consider event planning as an important facet of marketing and community building. Events allow developers and managers to bring together existing and potential customers in a pressure-free way, and to share and deepen their experiences with the commercial development.
Investing in integrated communication, marketing, and sales efforts is another point on which partners must agree in order to have a project develop consistently and profitably. This requires excellent communication within the investor-developer-manager team, and a willingness to adjust to real-world scenarios. In this context, purchase or rental agreements for commercial spaces are no longer based only on the investor’s purchasing power, but also on the commitment to a consistent relationship that will guarantee the coherence and sustainability of the project.