All Topics / Help Needed! / Help needed – being contacted by developers as my land is high density zoning

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  • Profile photo of Legal eagleLegal eagle
    Participant
    @barista20
    Join Date: 2015
    Post Count: 1
    May 27, 2015 - 2:56 pm

    Any help would be appreciated

    I am an owner of a block of land in the Sutherland shire about 3 minutes walk from Kirrawee station. I and 20 adjoining owners are being approached by various developers with the latest one offering 1.5 million 12 month option 12 week settlement with 2% deposit.
    Current fsr is 1.2:1 but zoning is high density. No minimum lot size for amalgamation under the dcp. Only 5m setback from road if non-living space adjoins otherwise 7.5m setback is required.
    Developer has quoted formula for calculation of purchase price as follows:
    Total area for 5 blocks – 3433 x 1.2 x .85% (efficiency) /90sqm x 197,000 per unit = 1,500,000
    Seems terribly low to myself and my adjoining neighbours as units sell in the area for $650,000 plus
    Any help or thoughts or formulas for assessing how valuable the site is as a development site would be appreciated thanks so much

    Profile photo of Andrew PittAndrew Pitt
    Participant
    @andrewpitt
    Join Date: 2015
    Post Count: 21
    June 1, 2015 - 9:12 pm

    interesting formula to arrive at a final figure – I punched the numbers in excel and got a different number.
    3433 x 1.2 x .85% (efficiency) /90sqm x 197,000 per unit = 1,500,000

    If you are not sure on the value – and you do want to sell – why not invest in a professional valuation?

    Andrew Pitt

    Enhancing Commercial Property to Empower Business

    Profile photo of Quantum LeapQuantum Leap
    Participant
    @quantum-leap
    Join Date: 2004
    Post Count: 56
    June 4, 2015 - 4:10 am

    Hi Folks,

    Coming to an end figure for a development site is dependent on what this particular developer can extract out of the site through ‘highest and best use’.

    This will be driven by market demand in the area, types of properties already developed in the area, what they sold for, his or her creativity, new trends emerging in the area, etc.

    A reasonable profit margin needs to be there for the developer to carry the risk for this whole exercise. 15% profit is probably the bare minimum, higher would of course be preferred.

    Andrew’s suggestion is a good one, and if you wanted to generate your own figures there are cheap feasibility calculators out there that can assist. Industry standard seems to be Estate Master. Garbage in, garbage out applies, so if you are going to go through the exercise of determining value, make sure you obtain expert assistance.

    Best Regards

    QL

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