Friday, 30 January 2015

Intelligent Land Valuation

Simon Perry - Principal Consultant & Rachel Lambert - Consultant

Is there such a thing as an undevelopable site?

There are a wide range of factors which affect the development potential of sites but with increasingly sophisticated tools and measures at our disposal, difficult sites are becoming more viable. This fact, coupled with the renewed competition for premium development sites, means that it is now more important than ever that developers have a fundamental understanding of the constraints, threats and opportunities of prospective sites. These factors will impact the development potential of the land and a proper understanding of these at acquisition stage is therefore highly advantageous.

Quantifying and managing the opportunities and constraints faced by a development can broadly be broken down into four phases (these have been mapped and presented here below).  These are:

1. Development purpose

The aspirations and needs for the proposed development site must be understood and the associated costs must be considered, along with the market it is intended to serve. 

2. Development Opportunities, Threats and Constraints

Once the aspirations for a development on the site are understood it is essential that an understanding of the threats and constraints (which may affect the viability of the development) along with the opportunities (which may assist) be appraised. These are generally centred on the following areas:

  • Is the site accessible?
  • Are there any utilities that affect the ability of the site to be developed?
  • Is the site located next to a main road or other extraneous noise source which will require mitigation?
  • Are there underlying contaminated land issues?
  • Is the site at risk of flooding?
  • Are there any ecological features which may hinder development?
  • Are there ecological and landscape features that could be used to make the development more attractive?
  • Is the development in line with policy?
  • What is the political appetite for development on this site?
  • Does this development meet national and local needs?
  • Do the local community want this development?
  • Is this land valued by the local community?
  • Will the development bring local benefits?

3. Constraints management

By identifying the constraints it is possible to plan for the management of these issues and to understand the financial implications.  It also enables a strategic assessment of how well the land fits within a wider development portfolio.

4. Maximise opportunities

As well as constraints, understanding the opportunities enables development value to be maximised by ensuring the opportunities are fully realised.

Informed purchasing can be achieved through these steps. Difficult sites can be developed as long as the opportunities, constraints and issues are understood, although these sites in the final analysis may not appeal to all. Even sites which on the face of it appear to be simple can become problematic if proper analysis is not done at the earliest opportunity. Effective planning at the acquisition stage minimises the probability of nasty surprises later on in the programme and ensures opportunities are maximised and realised at an early stage. 

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