Hi there,
This is my first post so please go easy on me.
I have an investment property in South Yarra Vic. It is an apartment in a 3 storey low rise block of 16.
It is in a fantastic location, close to the yarra, overlooking Melbourne Grammar. Those who know the area will know of the 3 towers currently coming out of the ground in the close proximity.
Our block is basically the last low rise residential left.
A developer has purchased the 2 commercial properties to the rear of the block. with the intention of building a 21 storey tower.
His solicitors have sent a letter of offer from the developer wishing to purchase the air rights above our building so that he can guarantee his potential purchasers that the view (city, yarra, school) wont be built out. A cash sum was mentioned along with an offer of the use of the facilities – pool, gym, outdoor bbq area etc that the new tower would provide.
What my question is, is how/who would be able to put a value on such a thing. He is not wishing to extend his building over our our block as that would be calculated on additional floor space he gains over our property.
What we would essentially be selling is the right to build our building up either as a top floor collective.
Or.
As a collective we cant however say no and then go and sell as a group to another developer as the developer behind us has already purchased one of the apartments in the block thus vetoing any group decisions that would adversely effect his development. Clearly, he is good at what he does and has been 3 steps ahead for a while now.
This has been a tricky one to get advice about, I am a commercial builder and have drawn on a number of contacts looking for legal advice. The only firm who pops up is……..you guessed it, his solicitors firm.
Apparently he did this with the development he is doing in the street next to us buy purchasing the air rights of the building that is directly in front of it which allowed him to build a cantilevered mezzanine which proved an outdoor entertaining/ bbq area. I went over to have a look and maybe ask some questions of the owners about the whole process. The building is now occupied by his offices.
So you can see the dilemma I/we as owners are in, how do we put a price that is reflected by current market prices as this is quite rare.
Thoughts, suggestions, comments are all valued!
Thanks in advance.
Hi Zenetti.
Hmmmmn…….very shrewd of the developer looking to buy the rights to the space above your place. There would be no shortage of solicitors on the Gold and Sunshine Coast who could probably help you with this. You see, if a developer can sell high rise apartments and guarantee their views can never be impeded, the developer can ask alot more $ for those apartments. However, he can't guarantee anything until he locks you into a deal that will make him alot more money than it will make you in selling some 'air'. There have been no shortage of law suits in QLD of people purchasing a high rise apartments with guaranteed sea views only to have another developer build something bigger or closer and they lose their highly paid for views. You really need to get some solid legal advice on this before signing away your rights.
Hi,
If you sell the air rights, you impede your ability to later sell your block, as collective owners, to another developer. No one would buy your block for good money if they know they can't build anything higher than 3 levels since the air above it has been "bought."
I wouldn't be doing it.
Angel
Thanks for your advice Anthony, this is what I am seeking. From the information I have been able to obtain the value of the developers apartments with guaranteed views would increase values by 150 – 200%
I feel the true value for the airspace would be a % of the projected increase of the apartments. This I would envisage be done via sworn valuation from an independent valuer, not just an estate agent. Along with what our block would be valued at as a development site.
Angel
I understand what I would be signing away, however everyone has a price. If i was to sell the airspace i understand this would rule out selling as a collective to develop. The real question lies in how would this sum be calculated?I am trying to seek legal advice on this, a chap at Clayton Utz has experience in this however his rates are not viable for an individual like me.
Just putting the feelers out there on the off chance someone has had experience with this from previous dealings.
Cheers.
weigh up: cashing in on profit from sale of air rights vs potential eventual sale to another developer.
Best off opening up a discussion with a valuer as to the value options you have.
I’m not in a mad hurry to be entering into negotiations. Ultimately any developer will want to maximize his profit and I know he will want to start selling them. So he still needs the other 14 owners to agree. The other thing I need to consider is developers are renowned for falling over so the last thing I want is the tower not to go ahead and the developer own our airspace.
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