Perhaps a developer or a real estate agent has come knocking on your door because they believe your commercial or industrial property has development potential. They’re offering big dollars but how do you know that price is the optimal price? What do you do if you don’t want to sell and need advice? Well, after calling us at Ray White Commercial in Sydney, we’ll tell you your next steps.

Town planners: how they could help you with your Sydney city fringe property

You own a commercial property on the Sydney city fringe. Until recently, no one has shown any interest in the property. Now, with talk of expanding the light rail along Parramatta Road and the NSW Government’s new density legislation and rezoning, the developers have come knocking. Whether or not you want to sell, you should get some advice first.

Enter the town planner.

Town planners are specialist professionals who work in urban and regional planning. With their advanced knowledge of council plans, zoning and more, they help businesses and individuals make informed decisions about land use and development potential.

Town planners for developers

More often, a developer will engage a town planner to assess a development application before it is submitted to council to ensure the development forms part of a landscape story, adheres to zoning and other regulations and complies with the local planning scheme.

Town planners for individuals

When you as a property owner engage a town planner to help you, they can review your property for development potential. Your town planner can evaluate the site, understand what’s possible within the site, whether or not you should amalgamate your property with a neighbour’s and so on.

Your town planner can also give you more detailed information on the true development potential of your site.

To explain further: Many developers rely on local real estate agents to identify possible development sites. The problem is unless the agent is experienced and knowledgeable about all the factors that affect development potential, they’ll look only at sites that fulfil the broader criteria: land area above a certain square meterage, access and possible uses. Often, that’s all they’ll look at before approaching an owner about taking some type of option over the property. (See our article about the different types of property options.)

Those real estate agents might not have made a physical inspection but looked only at area plans or a Google Earth view. The problems that could stop a development could come from any of several factors. There might be a heritage or community building nearby. Any development application that would overshadow it will likely be rejected. The site might be on a shallow water table (as in Mascot, for example), making any excavation difficult and expensive. Many town planners will include an environmental impact assessment in their report.

Critically, your town planner will understand the fabric of the locality and how a new development might or might not fit within the framework and community needs.

Even more important: your town planner will help you understand the concept of ‘highest and best use’ of your land and how that might affect you. The concept of ‘highest and best use’ is about valuation (the possible use of a property that would give the highest market value). This classification does not cover community benefit.

Having assessed all the factors, your town planner can determine a reasonable price for your property based on any development potential.

After all the analysis, your town planner might deem your site unsuitable for large-scale development. The resulting report will help you when trying to fend off enquiries about your intention to sell.

How much does a town planner cost?

What you need to pay will depend on several factors. These include the scale of the assessment, the location, how much experience the planner has and the scope of the work.

For an individual asking for general advice, town planners usually charge an hourly rate that ranges from $150 to more than $300 per hour depending on experience. You might need to pay anywhere from a few hundred dollars to $2,000. Some town planners offer a free assessment that might be enough for your needs.

Case study: Inner West property owners

Giovanni and Sam* bought their small Inner West industrial property many years ago to use as their artisan workshop. They’ve built a successful business with loyal clientele and they’re happy in their studio. Their challenges began when the area in which their workshop is located was rezoned from Industrial to B4 Mixed Use. This classification opens up permissible uses in the zone to include commercial premises (shops and offices), food and drink premises, residential multi-tenancy buildings, and light industries.

The developers and their agents came knocking. The men have no wish to leave their property but fearing they might be forced to sell, they gave me a call and asked for my help.

* Names changed

My advice was two-fold:

Speak to a town planner to get unbiased advice on what is possible for the site and to get an updated valuation on the land and buildings.
Obtain legal advice to understand the different types of options (Put/Call, etc.) and how that might affect the price, settlement period and any penalties.

In summary, a town planner can help you identify whether or not your property is suitable for development and also help you understand the value of your property. We can help you choose a town planner so ask us for help.

Your legal adviser can make sure you’re protected should you choose to sell your property or help you understand whether or not you are likely to be forced to sell.

Let us help you with your commercial property

As dedicated local commercial real estate agents, we can help you extract more value from your commercial property. Please get in touch to discuss your circumstances and assets so that we can give you personalised advice. Whether it’s commercial leasing, management or sales, we’re here to help you with your Sydney-based commercial property.

Contact us at Ray White Commercial Sydney City Fringe