Land valuation.
The value of building land is determined by the acceptable land cost of a feasible scheme.
The residual method.
The value of building land or of a redevelopable building is determined in reverse: from the revenue of the feasible scheme, its buildable floor area and local market exit prices, we deduct construction costs, fees, finance costs and the developer's margin. What remains is the acceptable land cost: what a developer can actually pay.
So everything starts with planning: the local zoning plan, easements, hazards, the density that can really be achieved; then with the market: credible exit prices, absorption rates. Our reports make every assumption explicit, so that value is discussed on facts, in negotiation as before the expropriation judge.
The residual method, in the glossaryLand sales
Know the acceptable land cost before negotiating.
Estates & tax
Inherited building plots, land banks, IFI: a reasoned value where public databases say nothing.
Asset conversion
Obsolete buildings, brownfield sites, infill plots: a redevelopable asset is valued on its potential, not on its current state.
What we are really asked.
By the residual method: the floor area achievable under the local zoning plan (PLU), projected revenue at local market exit prices, then deduction of costs (construction, fees, finance costs, the developer's margin). Comparison with sales of similar plots serves as a check. A "zone" price per square metre is only ever a starting point, never a conclusion.
It is the share of a property development's budget available to pay for the land, once all other costs and the margin are covered. It varies greatly with the actual buildability and exit prices: a few storeys or a few hundred euros per square metre of difference can double the value of the land, or halve it.
No: easements, natural hazards, access, the shape of the plot, servicing costs and the development timetable weigh as much as the zoning. Value comes from the combined analysis of planning and market, and that is what a valuation report documents.
Land to value, or to defend?
Describe your property and your situation, in complete confidence. The valuer who replies is the one who will sign the report.
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