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Acquiring The Perfect Development Site

There are two ways in which a property development project may begin. Either you find and acquire the perfect development site, after which you begin planning. Or you develop your plans and then need to find the perfect site to make your plans come to life. Whichever approach you take to your next development, acquiring the perfect development site is an important step. Get it right, and your investment will deliver those great returns you projected. Get it wrong, and the future may be filled with costly delays and dwindling profits. Property Change can help you source and acquire the perfect site, at the right price, which puts you in the best position to achieve your development and profit goals.

Decision Making

The acquisition of a development site is likely to be the first large investment made in your project. This is a big decision and one which can be complicated, especially if you do not have experience in site acquisition or are new to the geographical area. We do not advise that you rush into purchasing the first site which looks possible and instead take your time to consider a range of possibilities. The more you know, and the more information you are able to review, the better informed your decision will be.

Many development site decisions revolve around price and profits. We understand this and, as town planners, are able to help you determine which sites are available at a reasonable price as well as helping you accurately estimate the development’s future value. It is key that the site, combined with your development plans, are likely to deliver profitable returns as this metric will help you make the right decision.

Site procurement decisions need to take a number of elements into account. The location, price and development potential of the sites you find are important aspects to weigh against one another. It can be a confusing process and you may find yourself choosing between a number of prospective sites, all of which appear to offer a great return. That’s why many development projects turn to Property Change, as experienced town planners to provide guidance when it comes to making this decision.

Sourcing Sites

Part of our responsibilities as town planners is to always have our fingers on the pulse with regards to sites across Melbourne which are available and suitable for small- and large-scale development. Unlike estate agents, we specialise in development sites and can quickly identify which are most likely to yield great returns for investors. Additionally, we represent private owners who are interested in selling sites and properties which have development potential. These sites may not be available to the general public but can be procured through us, thanks to our industry connections.

Town planners at Property Change are able to locate sites with subdivision, development and rezoning potential. We are able to search for development sites according to our client specifics and then deliver a shortlist featuring number of suitable sites which meet requirements. This can speed up the process of searching for development sites independently, as well as ensuring you only view sites which we know are viable options for your development project.

The Numbers

A useful guide for development to quickly work out profitability is to work with the three thirds model. This is as follows:

Land value x 3 = Gross Realisation Value (GRV)

Then work out how many units you will get and divide the GRV by the amount of units, which will give you an indication of what you will need to the market to pay for each unit to make the development stake up. We can work out very easily based on the planning schemes how many units we think are able to be built on the site.

The Technicalities

As town planners, we are able to advise you on the legal, license and planning permission side of site acquisition. We are also specialists in rezoning which is often key for the success of large development projects. The perfect location is worthless if the necessary development permits and licenses are unobtainable. If you have found a development site, it is advisable to speak to an expert town planner before purchasing to ensure its potential is as good as it appears. This will ensure there are no false starts or expensive mistakes along your property development journey.

Some development projects hit financial stumbling blocks when it comes to choosing a site for construction. It is key to ensure your investors are on board and understand the value of the site, as well as its value to the project. Doing your research and analysing your options before presenting your recommendations to your investors is key. Property Change can help you do this and increases your changes of securing that much needed financial backing.

In order to avoid costly delays, we recommend you seek advice early in the process of scouting for the perfect development site. Property Change partners with development projects at all stages of the journey, to smooth the ride and speed up the process, while also making sure we don’t cut any corners. To find out more, get in touch with Property Change today.

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