Measuring Successful Outcomes
There are a number of ways to measure or prioritise the success of a development project. Many Landowners will strike a balance between more than one priority. The following factors are typically most important to our clients and prioritised when formulating the right strategy:
Headline Price
Perhaps the simplest parameter . . . achieving the optimum sale price for a particular parcel of land or development opportunity. Of course, ‘optimum’ can itself be measured in different ways, ranging from immediate cash return, to return over a longer period of time, or return in stages or instalments.
Timeframes
Obtaining best value, derived from the best possible development, is not always the prime motivator. In many projects the theoretical optimum value can carry risk of extended timeframes or failing to succeed. Often choices need to be made to weigh up the long term prospect of theoretical values against shorter term lower risk outcomes. Business decisions, estate planning, and other landowner considerations may tip the balance towards a quicker result, as can external risk such as changes in government, planning policy, housing markets, and local factors such as competing developments.​
Inheritance and Estate Planning
Projects that have the potential to benefit multiple members of the owner's estate need to consider how the timing of the project, and the receipts received, can be managed to optimise the value for the estate.
Legacy
Success is not always evaluated solely in financial terms, and not only in terms of return to the primary owners alone. In many situations land and property owners are concerned with how the development will benefit the wider community, how the development will complement the reputation of the owner, and how the development will fit the owner's own ideas of how the development should come forward. Often legacy considerations revolve around sensitivity to the local community and the provision of infrastructure, the environmental credentials of the development, and the wider reputation of the owner – particularly with academic and religious institutions.
Business Alignment and Special Interests
Out of a number of potential development routes, one or more may be viewed as aligning or complementing wider business strategies or plans, better than others. The balance of immediate up front capital receipts set against long term revenue from the property is often significant for commercial landlords, and for agricultural clients the value achieved from a development must be set against the sometimes very long-term generational impact on the farming operations. Institutional property owners may well have specific remits or aspirations that supersede value, such as the provision of affordable or key-worker housing.
Taxation
A critical and often overlooked aspect of forming a strategy for the development land is to consider the impact of the proceeds on tax liability. Often with larger developments the theoretical optimum value might well be achieved by a structure of agreement that triggers a significantly different tax regime and liability – resulting in a net receipt lower than alternative structures.
Ethical Alignment
Many clients have requirements regarding the type of organisations they wish to work with. This could require those involved in projects to be reputationally sound, work to specific environmental or ethical standards, or have a corporate cultural fit.
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In many cases, priorities do not need to compete with each other, and it is Hambleden’s role to ensure that the owners of land and property consider carefully what success means to them and to ensure that any project is as successful as possible.
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For a no-obligation discussion about what contract type would be most suitable for you and your project please contact us.