A new report from KPMG’s Golf Advisory Practice has found that developing a new 18-hole golf course in Europe, the Middle East and Africa (EMEA) has cost on average around €6 million in the past five years.
While it could be argued that the quality of golf developments in this period have been significantly higher, the results of the consultancy firm’s Golf Course Development Cost Survey highlight a cost increase of 31 per cent compared to findings from a similar report released in 2008.
However, the findings also include the news that a quality golf course could add as much as 20 per cent to real estate price premium at nearby and adjoining residential or tourist developments.
According to the survey, the most pressing problem developers have faced in recent times has been obtaining the necessary permits, which 35 per cent of respondents alluded to. 25 per cent found problems in obtaining finance and a further 25 per cent had difficulty staying within the original budget of projects.
The results were compiled using information supplied by owners and developers of more than 100 recently-constructed golf facilities in Europe, the Middle East and Africa. KPMG asked respondents about the planning and construction costs, issues and challenges they have faced over the course of their respective projects.
KPMG also approached 40 golf architects for their opinions on development hot spots and market trends, with respondents highlighting China, India, Russia, South America, the Caribbean and South East Asia as prosperous areas.
“After a few very tough years following the global credit crunch and the wider unfolding of the economic downturn in 2008, it is good to see stronger activity in today’s lifestyle real estate market and a revival of golf projects, with some prominent transactions taking place in various parts of the world,” said Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA. “We have managed to identify more than 400 active golf projects in the EMA region since early 2008, including new developments as well as full renovations or extensions of existing facilities.”
The full report can be found here.