Unlocking value potential with your neighbours

EPS acts as commercial advisors to a cohort of North Sydney apartment owners seeking to sell multiple adjoining strata apartment blocks as an amalgamated development site. The cohort aim to capitalise on the value uplift available to strata owners that ‘unlock’ the value potential of their collective properties. This uplift is realised through the opportunity of ‘amalgamation’.

Amalgamation acts to package multiple land holdings in one offering where the development achievable on the site is greater than what can be achieved on the individual allotments in isolation. This act of consolidation can be highly rewarding for land and unit owners in areas of high demand and that have significant dormant land value.

Development sites in North Sydney are one area in particularly high demand, being identified as part of New South Wales most economically significant areas ‘Sydney’s Global Economic Corridor’. The demand for development sites in North Sydney has escalated in response to the strategic focus on the Economic Corridor, specifically as a result of North Sydney’s Central Business District and University precincts revitalisation.

However, the successful delivery of site amalgamation is a relatively new commercial trend. The viability of which has been enabled by recent changes to NSW Strata laws requiring only 75% of unit owners vote in order to have majority say on the future of an existing strata property. The threshold was previously 100%, a mean feat to achieve.

In addition to legislative changes, the actual delivery and proven success of such ventures has piqued the interest of strata owners and developers alike. Another recent example in 2017 demonstrated 6 apartments blocks in North Sydney being marketed as a consolidated development site. realestate.com.au speculates that the 4,200m² site was purchased by an overseas developer for a record $90 million AUD.

EPS undertakes financial feasibility modelling to assess the hypothetical development potential of a site, and in order to determine the value uplift available to unit holders. EPS considers the ‘as-is’ value of individual sites and compares the value uplift available through amalgamation.

EPS financial modelling assists with building a business case for site amalgamation and acts to inform landowners of the potential of their property.

If you wish to look into the value potential,  or determine the highest and best use of your property, contact EPS and ask to speak with one of our land economics team.