An investment memorandum is a unique business plan for the investment. A presentation which is prepared in the right way allows you to successfully sell your land.
BOOM FOR LAND
Despite the fact that in large cities for several months there has been a clear decrease in demand for the plots for hotel facilities , the demand for investment land is still very high. The land that was supposed to be used for hotel investments is waiting for better times or alternative forms of development are sought for them, while residential developers, including companies with extensive banks of land, are still interested in attractive plots in the largest cities. Plots for warehouse investments and small retail park projects are also in demand. It is not uncommon to receive inquiries from investment funds, mainly from the Far East and South Africa. While looking for safe options in the real estate markets, the global investment capital focuses not only on residential housing. Both the largest global investors specializing in PRS (Private Rented Sector) and logistics are interested in Poland.
INVESTMENT MEMORANDUM
The investment memorandum is the most important document which presents essential features and factors which make the plot attractive. First there are source materials such as the excerpt from the land and building register, the basic map and the entry in the land and mortgage register. The documents include the information on possible ways of using the given property.
The second important issue is the statement on conditions to connect to the grid. This statement gives the investor an answer to the question what technical infrastructure is available in the area and what investment expenditure he will have to incur arrange the utilities. The knowledge on the conditions for connecting the utilities – electricity, water supply, sewage or telecommunications networks – increases the attractiveness of the land in the selling process. Unfortunately, owners of the land often overlook this issue, despite it’s relatively low cost.
GEOTECHNICAL ASSESSMENT OF THE LAND
Another important factor is the geotechnical assessment of the land. It’s results allow you to eliminate potential investor’s risks at an early stage of the process, and thus save both money and time. Geotechnical opinions are prepared on the basis of geological drilling, which allow the precise analysis of the water and land conditions for investments. The geotechnical documentation contains both a descriptive and a graphic part.
The descriptive part includes in particular:
-Recommendations for suitable foundations,
-Ways of securing the investment from groundwater,
-Information on the depth of groundwater and the anticipated fluctuations in their position,
-Information on the individual layers of the land,
-Recommendations regarding the implementation of drainage on the plot.
BUSINESS PLAN FOR THE INVESTMENT
The investment memorandum is a unique business plan for the investment. An adequately prepared presentation allows you to successfully sell your land. Such properly prepared document should contain, among others:
-Analysis of the real property location
-Evaluation of the possible land development concepts
-Characteristics of the local market with forecasts on its development
-Estimation of the scale of competition in the vicinity of the real property
-Feasibility study for the planned project
-Recommendations on the creation of the potential investment.
It should be pointed out that the investment memorandum serves the role as an encouraging bargaining chip in the negotiation of the terms of sale of the real property. Thanks to the information contained in the study, it allows the investors to make informed investment decisions.
INVESTMENT LAND CAPACTIY ANALYSIS
From my personal experience, no self-respecting investor would buy land without prior precise information on the estimated profitability of the investment. It is the benefits that can be achieved through the purchase of a specific plot that are the most important issue, while the price is of secondary importance. The investment land capacity analysis is a very important audit of the land localization possibilities, as it illustrates the maximum use of land for investment purposes. This document indicates how much usable floor space can be obtained: residential usable floor space in case of apartments and rooms intended for residential purposes and the business premises usable floor space in case of non-residential premises. This assessment is based on an analysis of the local spatial development plan or, in the absence thereof for the plot, the zoning permit (a decision of land development conditions); the study of the land use conditions and directions in case there is no local spatial development plan for the plot; Land and Property register. Proper assessment takes into account not only the initial development parameters resulting from the local spatial development plan, access to the public road, topography, plot shape, but also geological analysis of the ground, the location of underground infrastructure facilities and the sun exposure to the area.
Developers pay their arms and legs for the plots, and plot trading has reached a record high. After three quarters of 2021, the amounts invested by developers in land have caught up with the best annual results from previous years, so it is worth selling your land successfully.
While cooperating with leading architects, LBC Invest creates detailed plot development plans. In case of residential investments, we define the most important parameters of such a plan, which are based on research assessing the preferences of buyers on the housing market.
