Bigger may not be better as property firms eye tie-ups | Markets & Analysis

Bigger may not be better as property firms eye tie-ups | Markets & Analysis

It is often said that property is like no other business: most of the time to be successful demands special skills, but not always. In some circumstances, success is nothing to do with the actions of management.

We are, of course, spoiled by the success stories of property billionaires and the iconic buildings linked to their names but many of the best-known in fact made their fortunes through shrewd buying and selling, not through building - buying in the bust and selling in the boom, which usually involved taking big risks with other people's money.

Success as a developer is a different matter. It can take years to put together a site, then the developer has to have the vision to see what its potential might be, the skills to organise the financing, the control to manage the construction and the flair to sell the completed product so the cycle can start again. All this is much harder than it looks, which is why when you strip out inflation there are surprisingly few property development companies that have actually added much value.