Concept definition and feasibility study

The situation

A government-controlled developer was seeking to develop the new downtown area in the capital city, on a large tract of government-owned land. The proposed town center would provide a focal point for residents, employees, and visitors, and accommodate top-grade office and retail space. Strategy& was retained to define the concept for the mixed-use town center and assess its feasibility and funding requirements, with financial sustainability and maximal economic impact on employment and GDP the twin touchstones of the project.

How we helped

Beginning with a 30-year, bottom-up market assessment model covering four key real estate segments in the city, the Strategy& team determined market gaps, and the prices, trends, and qualitative gaps in the existing supply. We found the site’s usable land and infrastructure requirements and benchmarked similar international town centers to determine the optimal land use and asset mix. We described a detailed concept and value proposition, with all its components; identified an appropriate phasing and partnership strategy; developed the operating model and a 30-year financial model; and assessed the economic impact and progress of the project vis-à-vis the country’s development goals.

At the close of the engagement, the Strategy& team provided the client with recommendations for the mixed use master development, with a financially sustainable development strategy whereby the developer puts in the infrastructure, and then to achieve the vertical development either sells to or partners with private-sector investors. We also provided the client with estimated funding requirements, as well as a detailed implementation plan.

Results

After securing the cabinet green light, the project proceeded to detailed master planning stage, where Strategy& was retained to guide design efforts and ensure commercial viability of the business plan. The project has kicked off and is now in early infrastructure construction stages.