Magazyny.pl: How to sell an investment land?
Agata Zajac, Associate Director, JLL: In order to sell the land successfully you need three steps. The first is the proper preparation of investment memorandum.
What is it?
It provides a comprehensive compendium of information on the potential of the land for future use by the investor. It is also a kind of showcase of land to potential buyers.
What makes memorandum?
Firstly, it is all documentation of the plot, which include, among other things, extract from the register of land and buildings, basic map, land registers. The documentation will pre-determine the conditions of the property.
The second very important issue is to obtain technical conditions for connection to the media. Investor gives information, what kind of technical infrastructure is available in the area, will he have to incur expenditures to join the media and when basic utilities can be delivered.
Why is it such an important issue?
Knowledge of the technical conditions of the media - electricity, water, gas, sewage and telecommunications networks - increases the attractiveness of the property in the sales process and improves the time it takes to make a decision by the buyer. This issue is often overlooked by the owners of the land, and is not associated with high costs.
These are geotechnical studies that incur more costs, which is another important factor.
What does thanks to this research an investor find?
The investor is assured to the conditions of placing an object - if the ground is not contaminated, what are the geological conditions of it. The results of these studies will help the buyer to eliminate potential risks at an early stage, and thus save time and money.
What is the next step?
Obtaining environmental decision. For warehouse investments environmental decision may be issued within 3 - 6 months.
For more complex projects, having significant negative effects on the environment, the procedure may take 6-10 months. This is connected with the necessity to perform a report on the impact of the project on the environment.
Is the environmental decision an advanced process?
Yes, but, prior environmental decision allows a significant saving of time in the planned investment process.
The next step, after receiving the environmental decision, will be to obtain a building permit, from which the client often makes completion of the final purchase of the site dependent.
Both the environmental decision and building permit are issued based on the local plan - a strategic document created by the municipal authorities, setting out directions for development of the area. It is extremely important for investors.
The absence of such a document reduces the value of the property?
Of course, since the local plan determines the ability to locate a particular kind of investment in the selected area.
It determines the allowable building area of land, the rate of the minimum biologically active area, the maximum height of buildings, the number of parking spaces and other conditions and parameters of the investment.
The property owner should be interested in provisions in the plan already during the procedure of its adoption. This is guaranteed by a public consultation and for the submission of proposals and comments. Information on the adoption of a plan gets to landowners through public announcements and notices - posted at the headquarters of the municipality or published on the Internet.
Earlier interest in voting on the plan and pay the appropriate entry allow the investor earlier recognition of investment parameters and risk reduction.
A local plan assumes that the building area can be up to 30%, and plan B assumes 60%. This means that in the first case, on the plot of the1 ha you can construct a building of 30,000 sq. m., and in the second as many as 60,000 sq. m. It is obvious that an investor chooses an area with larger investment opportunities.
It is worth remembering that the change of the plan is a very time-consuming procedure that can take 12 - 24 months, so as much as the adoption of the plan.