Maximising the Value of the Option on your Land
As independent cost consultants, we have successfully helped landowners maximise the return on their land under option agreements for many years.
The final value landowners receive is often greatly reduced by pessimistic or overstated costs assessed by the developer. Our experience and expertise in this field allows us to interrogate cost estimates with confidence that we can generate better value for the landowner.
Pessimistic ‘Abnormal’ Costs
A key element that can devalue a site is the estimated cost of ‘abnormal’ construction works. Abnormal costs are additional or unusual costs that a developer might face when developing a site. For example, unusual ground conditions may mean that deeper and more expensive foundations are needed. Developers frequently err on the side of caution and overestimate abnormal costs.
These costs are deducted from the Gross Development Value of the site to arrive at an ‘Open Market Valuation’ which forms the basis of the amount paid for the land. The higher the projected cost of abnormals the less the developer will pay the landowner for the land.
Challenging the Developer’s Assumptions
We work on behalf of the landowner to independently review and challenge the developer’s figures. We apply our experience in this area by conducting a thorough cost analysis of abnormal costs. We interrogate all relevant cost assumptions and act as an expert witness if cases go to independent determination.
What We Can Achieve for You
We invariably achieve an increase in the final agreed Open Market Value by negotiating with the developer to accept more realistic abnormal costs. This increase in value can often be significant for the landowner.
We would be pleased to provide references and case studies to demonstrate the benefits of our involvement. Contact Lawrence Foote on 0207 099 6030 for confidential advice.