Phasing real estate projects considering profitability and customer satisfaction

Purpose The aggressive competition in the real estate market forces real estate developers to tackle the challenge of selecting the best project construction phasing alternative. The real estate industry is characterized by high costs, high profit and high risks. The schedules of real estate projects are also characterized by having large number of repetitive activities that are executed over a long duration. The repetitiveness, long duration of execution, the high amounts of money involved and the high risk made it desirable to leverage the impact of changes in phasing plans on net present value of amounts incurred and received over the long execution and selling duration. This also changes the project progress, and delivery time as well as their respective impact on customer degree of satisfaction. This research addresses the problem of selecting the best phasing alternative for real estate development projects while maximizing customer satisfaction and project profit. Design/methodology/approach The research proposes a model that generates all construction phasing alternatives and performs decision-making to rank all possible phasing alternatives. The proposed model consists of five modules: (1) Phasing Sequencing module, (2) Customer Satisfaction module, (3) Cash-In calculation module, (4) Cost Estimation module and (5) Decision-making module. A case study was presented to demonstrate the practicality of the model. Findings The proposed model satisfies the real estate market's need for proper construction phasing plans evaluation and selection against the project's main success criteria, customer satisfaction and project profit. The proposed model generates all construction phasing alternatives and performs multi-criteria decision making to rank all possible phasing alternatives. It quantifies the score of the two previously mentioned criteria and ranks all solutions according to their overall score. Research limitations/implications The research proposes a model that assist real estate market's need for proper construction phasing plans evaluation and selection against the project's main success criteria, customer satisfaction and project profit. The proposed model can be used to conclude general guidelines and common successful practices to be used by real estate developers when deciding the construction phasing plan. In this study the model is based on business models where all the project units are sold, rental cases are not considered. Also, the budget limitations that might exist when phasing is not considered in the model computations. Originality/value The model can be used as a complete platform that can hold all real estate project data, process revenues and cost information for estimating profit, plotting cash flow profiles, quantifying the degree of customer satisfaction attributable to each phasing alternative and providing recommendation showing the best one. The model can be used to conclude general guidelines and common successful practices to be used by real estate developers when tackling the challenge of selecting construction phasing plans.