Success is shaped long before a building or infrastructure project reaches procurement or construction. Even in the design stage, many of the opportunities to build lasting value have already passed.
From data centres and renewables to student accommodation and social infrastructure, the same lessons apply. Successful projects get on the right path early by fully testing the market, funding environment, risk position and likely challenges of delivery.
Asset owners and government agencies should view the set-up phase as a period of great strategic impact, where investing effort can meaningfully influence outcomes.
Test the market
It’s dangerous to leap into predevelopment activities without a clear view of how the market will respond. The more effective approach is a period of deliberate testing starting with meaningful market sounding.
Market sounding will only ever be as good as the people in the room. If the group is too narrow, or not properly briefed, feedback can reinforce rather than challenge incorrect assumptions. A broader cross-section of the market, given enough context on scope and commercial intent, is more likely to elicit considered responses that identify what’s workable, what’s not and where the risks lie.
This is particularly important if projects don’t yet have a committed tenant or operator. Design can continue to move forward, but only if there is confidence that the base offer has been tested and is attractive to a wide-enough market. Otherwise, there is a risk of locking in a design that won’t attract genuine market interest or meet a tenant’s needs.
Define and stress-test the commercial model
Successful projects define the commercial parameters early and understand their limits. Risk allocation, pricing and procurement strategy are often the points at which projects can become undone.
If the commercial model sits outside what the market is prepared to accept, responses tend to come back heavily caveated, with contingencies built in to manage perceived risk. That drives cost and erodes value.
It’s best to establish a baseline risk register, a risk-transfer model and a procurement strategy, then use market sounding to stress-test those assumptions. It’s never possible to eliminate all risk, but at least you’ll be better able to understand the market’s tolerance and where flexibility is required.
Taking the time upfront to identify these pressure points leads to a more realistic position going to market. It also improves the quality of feedback, because respondents are engaging with something they can genuinely consider delivering.
Structure for financeability
Another recurring issue is the assumption that once a project is well developed, funding will follow. Yet financeability is not always aligned with how projects are initially structured. What financiers need to see will vary across project types, but common themes include clarity around revenue, confidence in approvals and a risk profile that matches expected returns.
If factors such as planning frameworks, approvals pathways or funding eligibility are not properly understood early, projects can progress deep into design before hitting a constraint that can’t be resolved without significant rework. In some cases, that means stepping back to the start. Structuring the project with financeability in mind from the outset is a more reliable path than trying to retrofit it later. Early engagement with potential financiers and disciplined mapping of external exposures reduce the risk of late-stage surprises.
Maintain alignment and communication
It is common for strategy, procurement and delivery to sit in different parts of an organisation, with each making rational decisions but not necessarily aligned with a shared set of assumptions. Over time, that disconnect can show up in ways that can undermine the project.
To maintain alignment, there must be a clear line of sight back to the original rationale for investment – including the scope, risk position and timing – as a reference point for decision-making throughout the early stages and into delivery.
A clear communication plan that identifies and engages with internal stakeholders and the key market players ensures decisions are deliberate and that changes are visible to those who must live with them.
Invest in certainty
The front end of a project is often rushed in a desire to show progress and reach procurement. This pressure can mean decisions are made before they are fully tested, and issues are deferred into delivery when they are harder and more expensive to resolve. It increases the likelihood of inflated bids, renegotiation and redesign.
Projects that take a more disciplined approach and invest real effort in the set-up phase tend to progress with less redesign, renegotiation or resets. Market responses are more considered, procurement is more competitive and there is less need to revisit assumptions later.
By taking the time and prioritising market validation, commercial realism and financeability right from the start, owners and agencies can move forward with greater certainty and a much stronger chance of delivering projects that hold their value.
