Finding the right property development site is just the beginning. Once you’ve done your due diligence and run the feasibility numbers, the real work begins—securing finance, negotiating contracts, and preparing for development.
A well-structured acquisition process can mean the difference between a smooth, profitable project and costly setbacks.
Understanding how to acquire a site strategically is essential for a first-time developer or an expert looking to scale their portfolio.
This article outlines the essential steps, key stakeholders, and best practices for acquiring a site.
Step 1. Secure Finance and Structure the Deal
Before finalising a purchase, it is essential to secure financing and determine the best structure for the deal. Without proper financial planning, even a great development opportunity can fall apart.
Selecting the right approach ensures smoother project execution and better risk management.
Key Considerations
- Assess available capital and financing options.
- Decide on your equity requirement or consider a joint venture.
- Structure the deal in a way that aligns with your objectives, risk mitigation and project timeline.
Who is Involved?
- Developers and Investors – Assess financial capacity and investment strategies.
- Lenders and Brokers – Secure finance from banks, private lenders, or alternative sources.
- Legal and Tax Advisors – Advise on the optimal ownership structure (company, trust, or individual ownership) and contract conditions.
Best Practices
- Avoid applying for Development Approval (DA) before purchasing, as it can create financing difficulties if using retail finance.
- Consider using an option agreement to control the site without full commitment.
- Negotiate a long settlement period if possible to allow time for advancing approval.
- Ensure the financial structure allows for flexibility and risk management.
Step 2. Negotiate the Purchase
Once financing is arranged, the next step is negotiating favourable contract terms with the seller. This stage is crucial to ensuring that the purchase aligns with the financial feasibility study and development goals.
Successful negotiation can lead to better pricing, extended settlement periods, and favourable contract conditions that protect the buyer.
Understanding market trends, comparable sales, and seller motivations will strengthen your negotiation position and improve the overall deal structure.
Key Considerations
- Ensure the contract terms align with your due diligence outcomes.
- Negotiate a settlement period that allows time for satisfying any conditions.
- Structure the deal to include favourable conditions such as “subject to finance” clauses where possible.
Who is Involved?
- Real Estate Agents and Buyer’s Agents – Assist in finding and negotiating deals.
- Solicitor/Conveyancer – Review contract terms and conditions and ensure compliance.
- Town Planner / Architect – Assess zoning regulations and development potential.
Best Practices
- If possible, negotiate an off-market deal to avoid competition.
- Include conditions that allow an exit strategy if due diligence is unfavourable .
- Seek advice from industry professionals to ensure the deal aligns comprehensive due diligence and accurate feasibility.
Step 3. Conduct Pre-Purchase Planning
Even if DA is not sought before purchase, initial planning is crucial to avoid unexpected challenges. Pre-purchase planning helps identify potential roadblocks, streamline the development process, and reduce unforeseen costs.
Developers should assess zoning laws, infrastructure availability, and environmental constraints before proceeding with a purchase.
Key Considerations
Conduct a pre-lodgement meeting with the council to identify zoning restrictions.
Engage professionals to conduct preliminary site assessments.
Review environmental and infrastructure constraints.
Who is Involved?
Town Planner – Reviews zoning and local planning requirements.
Surveyor and Engineer – Assesses site conditions and infrastructure needs.
Environmental Consultants – Identifies potential constraints such as flood zones or heritage overlays.
Best Practices
Conduct early discussions with councils to preempt potential issues.
Review comparable development approvals in the area for feasibility insights.
Ensure the project aligns with local market demand and trends.
Step 4. Finalise the Purchase and Settle the Property
Finalising the purchase and settling the property is a crucial milestone that officially secures the development site. At this stage, all contract conditions should be met, financing must be finalised, and ownership transferred smoothly.
Proper coordination with legal, financial, and tax professionals ensures compliance with regulations and minimises any last-minute complications.
Key Considerations
Ensure all contract conditions are met before settlement.
Finalise funding arrangements with lenders and investors.
Transfer ownership and complete legal documentation.
Who is Involved?
Solicitor/Conveyancer – Manages the legal transfer of ownership.
Lender/Financier – Releases funds for property acquisition.
Tax Advisor – Ensures efficient structuring for tax implications.
Best Practices
Double-check all contract clauses and compliance requirements.
Ensure your finance is ready before settlement to avoid penalties.
Plan for post-settlement development activities, such as securing consultants and beginning design work.
Step 5. Begin Development Preparation
Once the property is acquired, the focus shifts to preparing for development. This involves assembling a team of professionals, refining project timelines, and ensuring all necessary approvals and designs are in place.
Proper planning at this stage will help mitigate risks, control costs, and streamline the construction process.
Key Considerations
Engage necessary professionals for design and approvals.
Refine financial models and timelines.
Plan for construction and sales strategies.
Who is Involved?
Project Manager – Oversees planning and development execution.
Architects and Engineers – Develop design and structural plans.
Marketing Team – Prepares pre-sale or leasing strategies.
Best Practices
Set realistic timelines and milestones for each development stage.
Work closely with professionals to optimise design and cost efficiency.
Monitor market trends to adjust sales or leasing strategies accordingly.
Conclusion
Acquiring a property development site is a structured process that requires financial preparation, strategic negotiations, and proper planning.
By following best practices—such as securing finance before settlement, negotiating favourable terms, and engaging professionals—you can successfully acquire and develop a site while minimising risks.
Ensuring a well-planned approach from acquisition to development will set the foundation for a profitable and smooth project.