LARGE SCALE PROPERTY DEVELOPMENT

The Process:

Regardless of the size of the development project, the process of property development follows a similar framework. Each step of the process holds varying degrees of importance, depending on the project's type and scale.

Identifying an Opportunity:

The world is filled with property development opportunities, but finding the right one that aligns with your requirements requires a deep understanding of the marketplace. We possess a comprehensive knowledge of Spain, particularly the Costa del Sol. This familiarity allows us to identify potential development opportunities that are not only attractive on the surface but also free from hidden and costly obstacles.

While it is possible to embark on a property development project in a new country or area, caution is paramount. Successful development companies have expanded into new territories, but meticulous due diligence is essential. We emphasize the importance of investing ample time and resources into evaluating the viability of a project before committing to it. It's worth noting that few developers achieve substantial profits from their first development in a new country, underscoring the necessity for thorough research and careful decision-making.

At Gala Investment Partners, we believe in the power of specialization. While venturing into new locations can be fruitful, focusing on areas you are already familiar with tends to yield greater ease and profitability. This principle applies to both geographical areas and specific areas of expertise, such as residential development or house Flipping. By capitalizing on our deep understanding of the local market and industry, we ensure a more streamlined and successful development process.

We are committed to providing you with exceptional opportunities in large-scale property development. Our expertise, market knowledge, and meticulous approach set us apart in the industry. Join us as we navigate the exciting world of property development in Spain and unlock the potential for lucrative returns.

Preliminary Feasibility Study:

Once you have identified a potential project that aligns with your instincts and experience, it is essential to conduct a preliminary feasibility study. The extent and content of this study can vary significantly among developers. Some highly successful developers rely on their instincts alone before proceeding with a full due diligence exercise. Others employ a more sophisticated approach involving architects, financial planners, and other professionals even at this early stage, which in our case we have this knowledge in-house.

The primary objective of a preliminary feasibility study is to determine the project's market viability, ensure effective cost control, and ascertain substantial profit margins. It is important to note that the potential profits identified in the preliminary feasibility study may diminish as you delve into the full due diligence process. Therefore, it is crucial to ensure that the projected numbers are enticing enough to warrant further pursuit.

Expression of Intent:

If your preliminary feasibility study yields positive results, the next step is to establish an agreement in principle with the seller of the land or project. It is important to remember that this agreement is subject to satisfactory due diligence and typically contains various clauses that allow for cancellation.

Despite its relatively weak nature, the agreement holds significance as it reflects a moral and sometimes legal commitment to proceed with the project and refrain from engaging with other parties during ongoing investigations. The strength of such agreements ultimately relies on the integrity and trustworthiness of the parties involved. Before entering into any expression of intent, it is crucial to thoroughly assess and ensure your satisfaction in doing business with the other party.

While preliminary expressions of intent are often prepared by the parties themselves, it is advisable to involve a lawyer, particularly if you are relatively inexperienced or unfamiliar with the legal system of the country in question. Even for a basic document of this nature, legal assistance can help protect your interests. Failure to seek legal guidance may inadvertently lead to a situation where a seemingly preliminary expression of interest becomes legally binding. Our dedicated legal team will collaborate closely with you to make sure everything runs as smooth as possible.

We understand the importance of thorough preliminary assessments and transparent agreements. Our expertise and experience enable us to guide you through these critical stages, ensuring that your interests are safeguarded every step of the way.

Due Diligence:

Due diligence is a critical process that ensures the accuracy and veracity of information presented or believed to be true. Its importance cannot be overstated, as it forms the foundation of informed decision-making.

The specific requirements for due diligence may vary depending on the project at hand, but it typically encompasses the following key areas:

The Local Market:

- Assessing the demand for the proposed product.

- Evaluating potential sales prices.

- Verifying the legal title of the land.

- Identifying any restrictions on land usage.

- Confirming the availability of necessary permissions for construction.

- Ensuring the availability of essential services such as water, electricity, and roads.

- Determining the accessibility of required professional support, including architects and project engineers, either locally or through established connections.

Construction Costs and Financing:

- Estimating the construction costs involved.

- Exploring potential sources of financing for the project.

Marketing and Sales:

- Developing strategies for effectively marketing and selling the project.

- Analyzing the marketability of the units being built and determining appropriate pricing.

Legal System and Protections:

- Understanding the functionality of the legal system in the target country.

- Assessing the level of protection provided in the event of unforeseen complications.

Special Considerations in Spain:

- Recognizing unique factors in Spain, such as complex building permissions, financial considerations, and restrictions on the use of professionals.

Who Conducts Due Diligence?

While the ultimate responsibility for due diligence lies with the developer, it is common to delegate a significant portion, if not all, of the process to professionals. This is particularly crucial when operating in an unfamiliar legal and administrative environment or when facing language barriers. Seeking expert assistance is essential under such circumstances.

Typically, your lawyer will spearhead the due diligence process, coordinating with various professionals as required and directed by you. These professionals may include accountants, hotel consultants, architects, project engineers, banks, and other specialists.