Property Rationalisation Disposal Strategies - LAPA

Achieving Best PriceThe foundation for developing strategies to achievebest price is to have a clear understanding of thedrivers of property value:Utility - Demand - Scarcity - TransferabilityAchieving the best price is also heavily influenced byRISK (as perceived by the purchaser) and thedegree of COMPETITION in the sale process15

UTILITYUtility – the ability of agood to fulfill a needWhat the property can beused forHow much would youpay for a hectare ofland in the desert?16

DEMAND17

SCARCITYScarcity whether naturalor created is one of themajor contributors tovalueHow much would youpay for this glass ofwater?18

TRANSFERABILITYThere can be noexchange value (ormarket value) if theproperty cannot benegotiated in themarket and be sold19

Strategy to Achieve Best Price?In formulating a disposal strategy to achieve bestprice, we need to identify ways that we canpositively influence the drivers of property value (itsutility and the supply/demand equation) to make itmore appealing to the market20

CompetitionOur main aim is tocreate the greatestlevel of competitionbetween the greatestnumber of prospectivepurchasers21

4 Components of a Disposal StrategyIt’s s all about creating buyer competition through:1. Identifying your product(s) and its target market(s)2. Presentation of the product3. Promotion to the target market4. Pricing and the method of sale22

Identifying our Product(s) andits Target Market(s)4 steps What’s s the obvious product? Which market segment is it part of? What are thelevels of demand and supply in that segment? Look for the unobvious product that might result ina higher and better use Then form a clear picture of your specific targetmarket23

Changing Your Product24

Examples of Changing your Product Getting a consent or plan change – for another use Building on Subdividing Promotion as a redevelopment site Demolition Restructuring leases (long term vs. short term) Selling two properties together as a single offering Or just identifying and promoting the opportunity foran alternative use25

When I got it wrong26

When I got it wrong27

Cinderella or Ugly Sister?28