The Challenge
The client wanted to consolidate their garage operations into a single site, which would allow one of the sites to be re-let or sold. We considered this with the clients and advised the Woking site had the most development potential. The aim was to maximise the return for the owner, who are well versed in property having a good property portfolio of their own.
The Execution
The clients knew that in order to get the best value, they needed to go through the pain of getting planning permission themselves. The alternatives often seem better at the start, but they can become a burden very quickly. The developer is never going to do you a favour so any problems he has will become your problems or will result in a price reduction. Two of the favoured options for developers are:
Option Agreements - these can be easy to document but often do not contain a commitment for the developer to progress with getting the best possible planning permission. For a small payment, the landowner loses control over the future of the site for a fixed period of time. If the developer does not make the right choices, it can result in missing a whole market when values are high and results in the property being handed back without a worthwhile planning permission when the market has fallen.
Subject to planning permission sales – these are more complex which brings the problem of more legal fees at the start. As both sides are trying to cover every eventuality, they can be very long and drawn out which is frustrating for everyone. If not properly dealt with, it can put the landowner in no better position than having an option, as mentioned above.
These clients knew that subject to planning offers and options can give developers an opportunity to make a quick return, sometimes for virtually no work. They had seen others sell prematurely and live to regret it.
The client understood that the planning process takes time, effort and money in order to be successful. The four key stages were:
Being located away from Woking town centre in Old Woking, we considered the most valuable use in this location was residential, therefore we appointed an architect with good residential experience to put forward a plan for initial discussions with the Council. By negotiation we agreed a layout that would work. Detailed designs were necessary (not just an outline permission) to maximise the value of the site.
This also involved the appointment of traffic consultants, environmental consultants, archaeological survey and even a bat survey which were all appointed by Jones Granville on behalf of the client.
We also talked to local Councillors to make sure we get no last-minute local objections.
The process was long and involved but by keeping on top of the Council, we were able to get a recommendation for approval which then was passed by the Committee.
Meanwhile, we were talking to potential purchasers many of whom wanted to buy before we got planning but these were turned down.
Once we had a detailed planning permission, we started discussions with bona fides developers and this resulted in several bids, so the sale went to best bids with six offers being received. The legal process was now very simple, so legal fees were reasonable. We then received a last-minute bid from the Council which was above the other bids and the transaction proceeded within a few weeks.
The site has been valued by Vail Williams at £1.2m based on its original use, and with expenditure of less than £100,000, we were able to sell the site for £3.75m.