Bundling Land in Single Sale

Hi all,

An opportunity will arise to purchase the blocks neighbouring our current block (1600sqm in total) with the view to sell them as a development opportunity.

However, is there any real-world benefit in doing so (i.e there is a multiplier/premium), or could it possibly be detrimental (ie. Reduces the pool of potential buyers)?

This wouldn't occur for a couple of years, so hopefully we are well post Covid timelines.

Appreciate any insight.

 

The bonus is that the two purchases, though separate transactions through different vendors, may be treated as a single transaction and you'd pay stamp duty at the combined purchase price not at the lower rate of two cheaper lots.

 

It will depend on what the demand for a larger block in that area is.

Your rate per sqm obviously erodes as the block gets bigger due to economies of scale, but can definitely go the other way if such a block had the right ingredients: zoning, location, demand etc


Selling 2 800sqm blocks in-one-line vs individually in dandenong will obviously have a different effect on price than say 2 800 sqm blocks (very rare) sold in-one-line vs individually in richmond.

From a development point of view: A lot of it will come down to what land use is permissible. If density is encouraged, then a developer will obviously be able to extract more from a project on said block, making it feasible to pay more after undertaking their residual land analysis.

If they can't really development much more than can what be achieved with 2 invidiual blocks, then little to no premium will be paid.