Understanding Permits and ProceduresThu, 11/01/2018 - 10:15
Q: What are the inhibitors and catalyzers of real estate development in Guadalajara and what is INVERTI’s role in improving this market?
A: The main problem in Jalisco and the metropolitan area of Guadalajara is the lack of alignment in urban regulations. Tlajomulco, Zapopan and Guadalajara have clear urban policies that allow improved urban conditions, but that is not the case for the rest of the municipalities. The lack of continuity in these regulations is preventing orderly growth. I believe that the main catalyzer for real estate investment is procedures and permits. Mexico’s National Development Plan (PND) sets out the requirements in a specific way. The fact that the development guidelines are becoming clearer is helping boost real estate investment.
INVERTI has 25 years’ experience helping to professionalize permits and procedures through the creation of a system that compiles all the laws and regulations in Jalisco and the metropolitan area of Guadalajara. This allows us to cooperate and advise the government on which regulations are hindering development. We also provide insight to investors on what they can do with their land according to the land-use regulations to ensure their projects are compliant, which gives developers legal certainty.
Q: What are the main challenges for developers when building successful and profitable projects?
A: We provide integral consulting on real estate projects, at the engineering and architecture stages of a development. Without procedures and permits projects cannot happen, as these are the base for defining the project’s parameters. Ninety percent of developers find a piece of land, design what they envision for it and finally start considering permits, but it should be the other way around. Developers and constructors often blame permits for the problems in their projects, but these should not be an issue if due diligence is carried out. I think the main challenge the country faces in this regard is to professionalize regulatory oversight. For example, universities teach architects and engineers how to build, but not how to handle permits. I think there should be a course on this.
Q: What are INVERTI’s most popular services and how are these shaping its growth strategy?
A: INVERTI was born from the need to follow procedures and solve the question on how to best use a given piece of land. We provide integral consulting that starts with the lawful use of land to delivering the required licenses. We accompany our clients from the land-acquisition stage, through the whole process of deciding what project will be developed, further notarizing the project and obtaining all the licenses to operate it. This turnkey service is in high demand. We have grown 100 percent yearly for the last three years and are forecasting the same growth to 2021 with the same personnel, as we focus on improving our practices and making them more efficient. For example, we have 25 ongoing projects for permits of which nine are in the analysis stage and 10 appraised. When we finish one project we already have a pipeline to substitute it. Some of our main clients are Oracle, Thor Urbana, GFA Architects and BP.
We also have extensive experience within different sectors. For example, over the last four years we have been working with Thor Urbana’s The Landmark project, which is the biggest mixed-use development in the metropolitan area. We were given a deadline to start developing and we made sure all mandatory permitting was done by then. This has helped us gain more clients and also to maintain a strong relationship with architects.
Q: What would be on your wish list for the next administration?
A: I think we need more clarity in the procedures for permits. This is key to continue fostering the growth of investment projects. Clarity will allow us to multiply investment, as it shortens project times, increasing capital returns. Investors need to know from the outset what they can develop on each specific piece of land to mitigate the risk of a project failing.