A recent purchase we have assisted a client with was to buy the next door property on behalf of a land banker. Most owners that have property with potential for medium density or high-density development, know that multiple adjoining properties are often required to unlock the full potential of a site
Most investors and developers also know that the money is made in the purchase so if you can save a few dollars with a successful negotiation, you are ahead from day one. Mindful of this, our client engaged us to negotiate anonymously on their behalf to buy the property next door that was on the market in the inner western suburbs of Sydney.
The Brief
Without going into too much detail, our client owned a property in a retail strip in inner west Sydney that was zoned B4 Mixed Use. Our client’s property was 300sqm and had a shop and first floor office on the property.
The B4 zone in this area allows residential flat buildings if the land size is larger 500sqm and the street frontage is bigger than 15m. Our client wanted to buy the property next door to maximise the development potential of his property, unlocking the potential for units that his property didn’t have at the moment.
The Negotiation
We were given the specific goal to save as much of the adjoining owner premium or what was colloquially referred to by our client as the “next door neighbour tax”.
We provided our guide to value based on recent sales and the value uplift that would result from the property being amalgamated and being able to be developed with 12 units. Our client living and breathing the location, wasn’t surprised with the numbers that we came up with and gave us the go ahead to negotiate on their behalf with the agent.
We engaged with the real estate agent and placed a strong early pre-auction offer for the property. Negotiations continued from here till an offer and acceptance was reached prior to auction.
The Outcome
As a consolidated site, the property was calculated in our initial discussions to be at worth another 15% more than the eventual sale price so our client realised a considerable saving. Our “faceless” client now have a development site in a fantastic location that they are pursuing a DA for at the moment. A great outcome. If you are in a similar situation or another where anonymity would be beneficial, get in touch for a no obligation discussion.