consider the viability of a project, and then monthly draw-down reports to sanction the loan. Consultants, such as Naismiths, have historically made assessments of projects and advised clients on potential risks or deficiencies in the business plan, and help quantify and balance them. However, attitudes are slowly beginning to change. The construction industry doesn’t have the best record when it comes to innovating its processes, but the benefits of digitisation are increasingly becoming clear. There is a real gap in the market for the proper use of granular data, and by combining historical data from previously completed projects and live information from the market, there is the opportunity for real-time risk metrics to be assessed across a range of projects. That real-time element means that not only can this be used at the commencement of the project, but can also be easily adapted for use at various stages throughout the build programme. This can be particularly useful when investors are looking at their options on specific projects, meaning that they can work with consultancies to independently review their viability when market conditions change, whether that be the cost of materials, the availability of labour or the potential end value on completion. It can also form a key part of recovery plans should the main contractor on the project run into financial difficulties, allowing the investors to essentially run a “lifeboat drill” and simulate what their level of liability is should such an event happen, and how they can mitigate that risk. In theory, the journey of a property development should be a fairly standard process – a developer buys land and invests resources with the idea that the value of the project will increase and bring them a profit. However, for the reasons we have laid out here, the process is one of multiple moving parts, and a small change in one variable can have a significant impact on the overall profitability or viability of a project. Having the ability to take a truly granular look at data can slow down those moving parts, support the longevity of a project and help safeguard investments. By fully exploring the advantages of digital financial forecasting and working with consultants that can deliver it, investors in construction projects can reap the reward of significantly improved cost predictions and - consequently - more favourable funding outcomes. The latest data from the Insolvency Service shows that 471 Construction Businesses collapsed in May About Naismiths Naismiths is a modern yet mature national real estate consultancy with offices in eight cities across the UK. Founded in 1963, its 50-strong team has built on its proven track record of partnership with the industry through a focused offering of three complementary service streams - project monitoring, building consultancy and asset recovery. Delivered by a highly-skilled team, Naismiths utilises a data-first, commerciallyfocused approach to the entire property lifecycle. The consultancy also offers the most comprehensive database for cost benchmarking data in the UK to enable robust, informed decisionmaking across the industry. Finance Monthly. Business 53
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