Industrial to Resi transition suburbs

Hi Everyone!

This is a general question, but I have not been able to find much info around on this...

If you were looking to purchase a 2-3 bedroom unit/terrace, in an up and coming inner city suburb, transisitioning from Industrial, what sort of things would you do to complete your due dilligance once the suburb is selected???

How do you check what developments are happening before they start? How do you work out which portion of the suburb is moving to resi first? Would you door knock all current resi properties to see if they want to sell?

Also, how long after resi. developments move in, and the suburb transitions away from predominately industrial, do resi. prices move up?? Is this cultural?

I there are many general questions here, but in the latest API magazine, there is a huge (as there should be) on the growing population, and housing 35 MILL people by 2030. This will result in higher density inner city living, and conversion of high value land from industrial to resi.

I think if everyone gives there 2 cents, this could become a good reference point.

cheers, Jacob.
 
conversion of high value land from industrial to resi.

If the land is already high value with it being industrial, what is your prediction regarding its value during that "conversion" phase.

Are you running with the assumption that the raw land values will increase, or decrease ??
 
If the land is already high value with it being industrial, what is your prediction regarding its value during that "conversion" phase.

Are you running with the assumption that the raw land values will increase, or decrease ??

sry, would predict that the raw land value would increase based on the utility change to resi, and the increased demand (population).
 
Hmmm,

My entire business model, that has been running now for 7 years, is almost exclusively based on your prediction being wrong.

It's only my opinion, but those 7 years have served me reasonably well thus far.

I'll be interested to re-visit your assumption during the coming years to see which way it falls.

Can you quantify this "utility" factor. I know for a fact the yield drops enormously when you convert land from industrial to residential.

This utility factor must really be something special to not only make up for the yield loss, but add something even more to get it into positive territory.

Perhaps this factor is masked by the massive costs needed to build something useful on the land, before you can derive an income, which isn't that flash at the end of the day ??

Please correct me if I'm obviously wrong...
 
i would have a thought a $250k shed on a half acre would pull in more cash for the investor and provide more back to the economy that a number of $250k units on half a matchbox.
 
The transition you are talking about has occurred in many cities, but always for the same reason - population growth and demand for housing.

So how do you know where and when?

Policy makers isolate demographic demand, so look at what Bernard Salt and others are saying.

State and federal goverments respond strategically to the percieved needs, so look at state planning strategy.

Municipal authorities respond to state government strategic recomendations, so look at changes to zoning and density requirements.

Developers respond to changes in demographics, local planning and zoning changes. So keep an eye on developments being proposed.

Finally, the punters get involved by buying the properties....by then it's probably too late to beat the curve!

All of this information is available, some of it is easy to find, some not.

Happy hunting!
 
sry, would predict that the raw land value would increase based on the utility change to resi, and the increased demand (population).

I am along the same thought pattern as TPFKAD;633462..... I think

I would look for resi property changing its zoning to commercial, light industrial, etc

A family member had their PPOR in a residential area, but the zoning has changed in the last year and a half to light industrial, or MIBA (Mixed Industry Business Area). A developer has offered to purchase their house (previously worth say $700) for $2.5M.

Seems much better.

I can remember watching a TV show about an english farmer buying all the large farming plots in the fringe areas in England on bordering towns, and he sat and waited for the government to rezone land to resi. He turned out becoming a developer and also a very wealth man once the zoning was changed.

Cheers,

F
 
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