Today, Jonathan and Kieron take a look at the critical topic of market risk in property development. They discuss how economic changes, interest rate fluctuations, and local market shifts can significantly impact profitability for developers. The duo emphasises the importance of proactive planning and exploring multiple exit strategies to mitigate risks.

KEY TAKEAWAYS

Market risk in property development is influenced by economic changes, interest rates, and local market shifts. Developers cannot control these factors but can plan for them to mitigate their impact on profitability.

Conducting thorough research on comparables, absorption rates, and local market conditions is crucial. Developers should avoid assumptions about demand and ensure they understand the target market before proceeding with projects.

Developers should consider multiple exit strategies, such as build-to-sell, build-to-rent, or tenant buyer options. This flexibility allows for better adaptation to changing market conditions and helps manage cash flow effectively.

It is essential to stress test financial projections, including sales values and construction costs, to prepare for worst-case scenarios. Maintaining a working capital pot can provide liquidity to navigate unexpected challenges.

Establishing and maintaining strong relationships with brokers, agents, and investors is vital. Open communication and transparency about market conditions and project status can lead to better collaboration and support during uncertain times.

BEST MOMENTS

"Market risk rewards those who plan for the worst and build for the best."

"The best developers understand you can't eliminate the risk, but you can at least plan for it."

"You need to know how to pivot, but we're going to be talking about how to plan best and a few little pointers."

"You can't control the market, but you can control your response and how you react to it."

"One of the biggest mistakes is assuming demand without checking real comparables and absorption rates."

HOST BIOS

Jonathan is a property developer and entrepreneur with a background in finance and construction. Originally from South Africa, he holds degrees in Accounting and Auditing and relocated to England in 2003. He gained financial and operational experience at firms such as RSM, Prudential, and Baker Tilly before transitioning into property. Since 2014, Jonathan has managed major commercial-to-residential conversions and new build developments, particularly across the South West. His analytical mindset and on-the-ground experience help listeners navigate the property world with confidence.

Kieron is a construction expert and entrepreneur with over 20 years of industry experience. Starting as a mason, he went on to found Shepherd Construction in 2012, delivering projects across both the public and private sectors. From extensions to luxury new builds, Kieron has earned a reputation for quality, precision, and strong leadership. As Managing Director, he’s involved in every stage—from design to delivery—offering a no-nonsense, deeply practical perspective to anyone looking to build with success.

https://www.facebook.com/jonathan.stobbs.7/

https://www.linkedin.com/in/jonathanstobbs/

https://www.facebook.com/kieron.shepherd.73

https://www.linkedin.com/in/kieron-shepherd-83b979aa/

https://www.propertydevelopersplaybook.co.uk/