Investment land and its proper evaluation
Owners of large plots of land often ask us whether their land can be considered "investment land." They often hear that investment lands are the most sought after by investors and therefore the most valuable. But what exactly is an investment land, and what types of investment lands exist? How are they properly evaluated?
Investment land
An investment land is a property on which, according to the valid zoning plan or building conditions, an investment associated with business activities can arise. This can include factories, warehouses, logistics halls, office buildings, or commercial spaces. Residential buildings cannot be constructed on these lands, as properties designated for business often cause disturbances for local residents. Therefore, such lands are usually located on the outskirts of cities or near expressways and highway interchanges. Exceptions are office and commercial buildings in cities with good transport connections.
Types of investment lands
Investment lands can have various uses depending on size, location, zoning plan, and access roads. The most common uses of investment lands include:
- Warehouse parks: Large warehouse complexes used by multiple tenants. These are mainly located near larger cities, often on their outskirts along important transport routes.
- Big-Box warehouses: These properties are usually located 10 to 50 km from the borders of large cities and are accessible from expressways and highways. Their main tenants are e-commerce companies, retail chains, and logistics companies.
- Small business units (SBU): Smaller warehouses ranging from 500 m² to 5,000 m², often combined with office spaces. They are suitable for companies that emphasize excellent location and aesthetic appearance of the building.
- Manufacturing facilities: Lands designated for the construction of manufacturing facilities are precisely defined in zoning plans. Complicated technical and environmental requirements may restrict their use.
- Data centers: Buildings intended for storing and processing IT infrastructure, which require high electricity input and are usually located away from main roads.
- Office buildings: This type of property is among the most active investment segments. Office investments are usually realized in the largest cities.
- Retail parks: Investments in shopping centers and retail parks are still very attractive in Slovakia. Such projects are realized in cities as well as on their outskirts.
Verifying the investment land
The most important legal document for determining the status of the land is the zoning plan of the municipality. This document specifies for what purposes the land can be used, what buildings can be constructed on it, and other building parameters, such as the maximum height of the building. The zoning plan is publicly available online or at municipal offices. If the land is not covered by a zoning plan and the owner wants to change its use, it is possible to request a decision on building conditions.
Properly evaluating investment land
To properly evaluate an investment land, it is first necessary to determine how much of its area can be designated for investment purposes. This analysis will help estimate the initial value of the land, which will then be adjusted based on technical parameters such as usable area or investment potential. These parameters are stated in official documents issued by local authorities.
If there are additional conditions relating to the land, for example, if it is located in a reclamation zone, is listed in the register of monuments, or if infrastructure projects are planned nearby, additional documents will need to be obtained.
To obtain an appraisal of the land, it is advisable to contact the experts at the investment and consulting firm CORE.
