Why Real Estate Developers Get Location Decisions Wrong

A version of this article appeared on LinkedIn by Patrick Mwangi of Rickfes Construction Ltd.

Real estate success across the globe depends heavily on location, but relying solely on hype or perception can distort vital investment decisions. True viability is determined by the specific potential of an area rather than superficial trends.

According to Patrick Mwangi, the Chief Executive Officer (CEO) of Rickfes Construction Ltd, a sound location must support both livability and commercial viability through fundamental elements. These essential factors provide a baseline for sustainable growth.

Key infrastructure serves as the primary pillar, including well-built roads, sewer lines, water supply, and reliable power connections. Proximity to workplaces is equally critical because it increases daily convenience and directly drives the local demand for residential and mixed-use developments.

Safety and security also dictate site viability, requiring environments that remain free from environmental or wildlife-related risks. Furthermore, a stable and friendly neighbourhood allows residents and businesses to settle comfortably over the long term.

Physical site attributes must be thoroughly evaluated before breaking ground. Developers need stable ground conditions that are not overly sloped, muddy, or prone to seasonal flooding, while proximity to scenic viewpoints remains important for off-grid homes, resorts, and retreat-style projects.

Access to reliable social amenities, including shopping centres, schools, hospitals, and places of worship, completes the foundational framework. However, establishing these fundamentals is only the first step toward securing project profitability.

A location may perform exceptionally well for one type of asset but fail entirely for another. An area might support residential builds, but the ideal property typology could be one-bedroom units rather than two-bedroom apartments, or townhouses instead of high-rise blocks.

Many developers make mistakes by forcing projects into specific areas simply because similar developments exist nearby. Profitability relies on precisely matching the unique land potential with the intended project purpose and the correct product mix.