Exploring developer return composition in residential-led town centre regeneration

What the paper says

Purpose This study explores the diverse returns – both financial and non-financial – that motivate developers involved in residential projects within small-town centres. The purpose of this study is to understand the broader range of considerations that influence developer decisions, moving beyond traditional financial metrics. Design/methodology/approach The study adopts a qualitative, comparative case study approach, focusing on two small towns in New Zealand with contrasting patterns of residential development: one characterised by new-build projects and the other by adaptive reuse of existing, often heritage, buildings. Primary data was gathered through semi-structured interviews with developers in each town. The analysis draws on portfolio return theory and place attachment theory to interpret differences in developer motivations, highlighting the nuances and heterogeneity of small-town developers. Findings The findings reveal distinct dynamics between two case study towns. In Cambridge, where new-build developments dominate, investment is primarily driven by direct financial returns, similar to patterns seen in metropolitan centres. In contrast, Whanganui, characterised by adaptive reuse projects, particularly those involving heritage buildings, exhibits a more complex motivation structure. This includes government incentives, project-generated externalities, personal satisfaction, place attachment and community goodwill. Motivated by these factors, along with the close-knit community and the historical significance of the reused buildings, developers are often willing to undertake projects with marginal financial returns. Research limitations/implications The findings are specific to New Zealand small towns and are based on interviews conducted in 2022 and 2023. The interviews reached saturation for the topics investigated. As an exploratory study, this study’s aim is to provide rich contextual insight into the case studies. However, the authors acknowledge that the results are shaped by the economic conditions, social dynamics and regulatory frameworks in place at the time of data collection. These factors may limit the transferability of the research. Practical implications For policymakers, these findings suggest a need to broaden the toolkit for supporting town centre regeneration. Traditional instruments such as grants, tax relief or zoning flexibility remain important, particularly where financial viability is tight. However, in smaller towns where social visibility is high and non-financial motives are significant, these tools can be complemented by non-monetary incentives such as public recognition, heritage awards or symbolic support. These forms of acknowledgement may resonate strongly with developers whose motivations include civic pride, legacy-building and connection to place. Originality/value This research takes a cross-disciplinary approach by combining portfolio return theory with place attachment theory to offer a more holistic understanding of developer motivations in small-town residential projects. It contributes to the literature by addressing the underexplored role of non-financial factors in town centre regeneration developments, and by highlighting how emotional, social and financial returns intersect. The study offers fresh insights for policymakers seeking to incentivise development through a broader lens of value creation.