What advantage to developing adjacent blocks?

[bweed]

I have an opportunity to purchase 2 adjacent blocks in townsville that would be ideal for a unit development. Either one on their own would represent a good opportunity. Now I'm wondering if there's any tangible benefit to doing this as a single development.

It doesn't appear that I could put any more units on the entire block than I could if they were two seperate blocks, so is there any real advantage here aside from obviously a bigger return for a bigger investment? Are larger developments typically seen to have a greater intrinsic value per sq metre? If so why would that be?

The only really tangible thing I can think of is that I have two sets of boundary offsets into which space I might be able to put a pool or some other sort of recreational area.

 

[geoffw]

You might be able to make a single common driveway between the two flats, increasing the available unit size?

 

[APerry]

I have a client whose strategy is to bye a block and convince his neighbor to do a joint venture development. The advantage is exactly as Geoff stated, each party only has to contribute half of the common driveway, allowing them to erect more or larger units.

I'm not sure how he ensures that his neighbor will joint venture with him, but he does this as a full time occupation so it must be a good strategy.

Regards
Alistair

 

[Sunfish]

Res2 zoning in Townsville is changing (Thuringowa is a serarate city) and density is being reduced. Two blocks totaling 2024 sq will have an extra couple of bedrooms allowed though. You may have till the end of the year to make app under the old plan.

Read it on

http://www.townsville.qld.gov.au/services/plandevt/cityplan.asp

Be careful. While there is solid growth there are an awful lot of units going up, especially in the inner city.

 

[Sunstone]

Dear Bweed,

It comes down to what your end objective is and whether you are looking to hold both blocks long-term. I would also ensure that you fully understand the zoning and what you can physically do with it (Including whether it is affected by flooding, etc.) (Agents do not know.)

(An earlier post of mine which you may find helpful):
http://www.somersoft.com/forums/showpost.php?p=107423&postcount=4

Some advantages to developing adjacent blocks:
(Note: Every area is slightly different but this information is applicable for my local area.)

-Less setbacks
Typically the front of a block will have a setback of 6m which can in some cases can be relaxed to 4m, however on the three other sides you will have a 1.5m setback (2m for two story buildings). Having two blocks beside each other removes the 1.5m x 2 setback for the connecting sides. Thereby meaning a greater usable area.

-More flexibility
-One of my development blocks allows myself in theory to build “15.4 dwellings”. If a neighbouring block could build 6.6 then at least one more dwelling could be built as a result of combining both development sites.

-Depending on the shape of the block there can always be problems with “dead space”. A top architect can minimise this but the larger the overall size of the block the more flexibility he has in meeting both the council and the developers requirements. This includes managing recreation space, parking space, turning bays, refuse areas (Including commercial refuse truck ingress and egress requirements.) and may extend to special wash down areas for both cars and refuse areas.

-The slope (or fall) of your block may not be ideal. But it plays a critical role in where stormwater drainage and sewer lines are placed. If the fall of one block is insufficient you may find yourself having to 1) Negotiate access or an easement through a neighbouring property or 2) Having further costs in earthworks and retaining walls.

-Increased economies of scale
The larger the development the more economic it can be with regards to material and labour costs as well as certain fixed costs being lower per unit. At the same time this must be weighed up with the increase in risk a larger development inevitably brings.

-Control
Having the block beside means that you know what will be built on it. At the end of the day it is the surest way to ensure that the development that you are going to want beside your other block is going to take place.

Enjoy the journey, and let us know how you go.

Cheers,

Sunstone.

 

[bweed]

Thanks all, some good stuff for me to think about.

I've looked into it a little further and as far as broad density regulations for the zone there was significant advantage under the current system though it's not really apparent in the new.

Under the old system you were allowed 1 brm/ 80 sq m. With a bonus 4 brms allowed if the block is over 2000sq m (which the two combined would be). An extra 2 units is certainly a nice bonus. The new system however is a little odd. it's based on a number of people per hectare 187, with a bonus of 5 for an over 2000 sq block. they then calculate an allowed number of units based on a figure of 2.5 people per unit. though there's no stipulation on how big or small the units are... they could all be 1brm or all 4brm as long as i meets the rest of the building paramaters... though based on 2 bedroom units it actually works out a fraction better than the old system??? odd that they claim to be reducing density in the area....

 

[Carolyn]

bWEED

I AM IN THE PROCESS OF GETTING SOME TOWNHOUSES APPROVED IN noRTH wARD (tOWNSVILLE). WHILST THE NEW CITY PLAN HAS NOT YET BEEN GAZETTED THE TOWNSVILLE CITY COUNCIL IS BASICALLY ASSESSING APPPLICATIONS AGAINST THE NEW PLAN. Under old scheme I was able to get 8 units, new scheme 3 units and we have applied for 6 units(this was a few months ago so am hoping all will go to plan). I did not notice what suburb your blocks were in. But I would definitely base any calculations against the new City Draft Plan.
I am a big fan of investing in Townsville - Nth Ward,some parts Sth Townsville , and City are my favourties.
Good Luck
Carolyn