Land search and acquisition

Search and acquisition of land

The choice of land asset determines the economy and sustainability of the future project. ERA CAPITAL will show how an in-depth audit of urban planning and legal risks turns site search into a manageable process. Market analysis and choice of land plot for specific purposes are the basis for investment decisions.

A land asset is the starting point of any development or commercial project. From how accurately the site corresponds to the strategy, budget and parameters of the future object, depends on the feasibility of the project, its financial model and final profitability. ERA CAPITAL helps investors, developers and companies find sites that are truly suitable for a specific task – not just available on the market.

Why do you need a professional selection?

Buying land for development is fundamentally different from purchasing land for personal needs. Here, each decision entails financial, legal and town-planning consequences, which are manifested not immediately, but already in the process of implementing the project.

Three of the most common and costly self-search errors are:

• Purchase of a plot with a type of permitted use (IU), not corresponding to the target project.
• Changing the IRI is a long and unpredictable procedure, the result of which is not guaranteed.
• Underestimating the cost of engineering connection.
• The lack of necessary facilities near the site can increase the project budget by hundreds of millions of rubles.
• Overpayment due to lack of market benchmark.
• Without a comparative analysis of similar transactions, the buyer has no objective reference point for negotiations.

In addition, a significant part of attractive sites for development does not fall into open sources. They are implemented through direct negotiations with rights holders or within closed offers - and are not available to those who are looking for a site on their own.

What projects does ERA CAPITAL select land plots for?

The requirements for the site depend on the type of project. ERA CAPITAL selects sites taking into account the client’s business objectives and key parameters:

Residential complexes and IFC:

transport accessibility, infrastructure, urban planning potential, compliance with VRI.

Trading facilities:

traffic, visibility, parking, environment and competition.

Warehouse and logistics complexes:

proximity to highways, engineering capacities, railway access, no restrictions on construction.

Office centers:

business location, transport connectivity, the possibility of selling the required amount of space.

Hotels and apart-hotels:

tourist or business attractiveness, pedestrian accessibility, compliance with VRI.

Production facilities:

engineering resources, logistics, sanitary and environmental restrictions.

What is considered when searching for a site?

Professional selection of a land asset is a multifactorial analysis in which no parameter is considered in isolation from the rest.

Urban planning parameters:

• Type of authorized use (IU) and its compliance with the target project.
• Rules of land use and development (LDP): zoning, building limits.
• Urban planning plan of the land plot (GPZU): building spot, indentations, red lines.
• Zones with special conditions for the use of territories (ZOUIT): protection zones, sanitary breaks, water protection zones.
• Restrictions on height, density and coefficient of development.
• Legal status:
• EGRN data: owner, category of land, encumbrances.
• The presence of easements, arrests, bails, litigation.
• The history of transfer of rights, the risks of challenging the transaction.
• Conformity of the actual use of the site to its legal status.
• Engineering support:
• Availability and power of connected networks (electricity, gas, water, sewerage).
• The cost and timing of obtaining technical conditions (TU).
• Distance to connection points, the need to build external networks.
• Transport accessibility and location:
• Proximity to transport hubs, highways, interchanges.
• Pedestrian and car traffic (for retail and hotels).
• Logistical connectivity (for warehouses and production).

Competitive environment and market saturation in the location.

Investment parameters:

• Correspondence of the price of the site to the market level (comparative analysis).
• The potential output of the project: GBA, GLA, GFA.
• The cost of land in the structure of the overall budget of the project.
• Preliminary assessment of technical and economic indicators (TEP).

Market analysis and formation of a list of sites

The search begins with a detailed brief: ERA CAPITAL captures the strategic goals of the client, project parameters, the budget for the purchase of the site, priority locations and deadlines.

On the basis of the brief, a long list is formed - an expanded list of sites that potentially meet the specified criteria. Sources: open market, closed offers from rights holders, ERA CAPITAL’s own database, direct negotiations with potential sellers.

Each site from the long list passes the primary analysis on key parameters. Sites that have not been filtered are excluded with reasons.

The remaining options form a short list - a list of sites, for each of which an in-depth analysis is carried out: urban planning, legal, engineering, market. The results are drawn up in a comparative format, convenient for making a decision.

Support of negotiations and purchase of the site

ERA CAPITAL participates in negotiations on the buyer’s side. That means:

Independent assessment of the market value of the asset and the formation of a reasonable negotiating position.

Analysis of the terms of the transaction:

the structure of payments, terms, conditions of transfer, guarantees of the seller.

Identification and coordination of risk reduction mechanisms:

assurances and guarantees, conditions for return, pre-emptory conditions.

Coordination with the legal advisers of the buyer during due diligence.

Support at all stages until registration of the transfer of ownership.

Stages of search and acquisition of land

Why ERA CAPITAL?

Access to a closed market.

A significant part of interesting sites for development does not go on sale. ERA CAPITAL works with such offers thanks to long-term relationships with rights holders, developers and institutional market participants.

An integrated approach.

The site analysis in ERA CAPITAL covers both market, legal, town planning, engineering and financial aspects. The client receives a holistic picture, not disparate conclusions from different specialists.

Knowledge of the markets of Moscow, St. Petersburg and regions.

ERA CAPITAL has up-to-date analytics on the land markets of key agglomerations, which makes it possible to form reasonable price benchmarks and compare sites in a market context.

Selection of the site for strategy, not for accessibility.

The starting point of ERA CAPITAL is not what is on the market, but what the client needs to implement a specific project. This fundamentally changes the logic of the search and the quality of the final result.

If you are planning to purchase a land asset for a development or commercial project, leave a request. ERA CAPITAL will conduct an initial analysis of your task and offer an approach to finding a site that matches the parameters of your project.