Introduction
Blocks of units on sites with development potential present both an opportunity and a challenge for sellers. Simon Abbott explains how to assess value when future upside may be factored in.
What Makes Development Potential Valuable?
- Zoning that allows for greater density or vertical extension
- Large land parcels with minimal overlays/restrictions
- Located close to transport, employment or infrastructure projects
Common Valuation Mistakes
- Assuming all development upside is immediately priced in
- Overestimating demand from developers—in many cases, investors outnumber pure developers
Best Practice Valuation Steps
- Get a zoning and development advice report from a town planner
- Obtain comparable sales both as yielding assets and as “raw” development land
- Consider getting plans/sketches drawn up but don’t overspend at DA stage if the intent is to sell, not develop yourself
Simon Abbott’s Advice
- Present the “plan B”—a yielding holding for buyers not ready to develop immediately
- Target a dual-audience campaign (investor and developer)
For high-potential sites, a custom method of sale may be best.
Ask Simon Abbott for a site-specific strategy and valuation today.
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