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Property Investment

Property Development Patterns Increase Confidence of Investors


Understanding development patterns is of prime interest to property investors because it can help them anticipate the path of future growth and thus locate sites with significant appreciation potential.

Sites that are on the path of future growth have strong appreciation potential since the value of a site with not development around is significantly lower than the value of a site that is surrounded by new developments of various uses either commercial or residential or a combination of the two. The suburbanization of households was followed by suburbanization of office activities and services.

Urban Development

Urban development and growth patterns can be better understood and predicted within the framework of one or more of the four basic models describing urban structure and patterns of urban growth:

1) the Axial-Central theory, introduced by Hurd (1924), which postulates that cities grow in an axial mode

2) the Concentric Circle theory, introduced by Burgess (1925), which postulates that the city consists of concentric rings of various uses extending around the city’s the central business district (CBD)

3) The Sector theory, introduced by Hoyt (1939), which combines the axial and concentric ring theories to suggest that a city develops partially in sectors and partially in concentric ring zones

4)The Multiple Nuclei theory, introduced by Harris and Ullman (1959), which postulates that urban growth is manifested in multiple clusters of complementary uses

Suburban Development

Suburban growth is the main venue through which mature metropolitan areas expand. Suburban sprawl has been a common phenomenon in US metropolitan growth patterns and has been stimulated by the availability of cheap land.

Hartshorn and Muller describe a five-stage model of suburban growth, which includes the following stages

1) Development of bedroom residential communities

2) Development of suburban regional malls, as well as office and industrial parks

3) Intensification of housing and commercial development and its diversification in terms of quality and price

4) Development of high-rise office towers and high-tech research and development activities in selected suburban corridors

5) Maturation of suburban downtown centers through the development of cultural, social, and recreational facilities, completing the full spectrum of land uses found in mature urban areas

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