The owners of large plots of land usually wonder whether they can consider their land to be an “investment plot”. It is generally believed that this type of real estate is desired the most by investors. What is an investment plot and what types of it can be distinguished? How to determine the price of an investment plot? The article below explores these subjects.
Investment plots are real properties which, in accordance with the local development plan or development conditions decision, can be used for an investment project related to conducting business activities. These can be factories, warehouses, manufacturing or logistics halls, office and commercial buildings. No residential buildings can be erected on this type of land. Buildings used for business activities are often very burdensome for local residents; therefore, investment areas are mostly located at suburbs or outside of the cities, in the vicinity of trunk roads, express roads or motorway junctions. Exceptions include office and commercial buildings, which are erected in well-connected places inside the cities.
This depends mainly on the size and location of the plot, as well as the provisions of the local development plan (or development conditions decision) and the state of access roads. Different types of buildings can be erected on an investment plot depending on the combination of the above-mentioned elements. These include mainly:
Large-area warehouse developments used by more than one tenant. This type of real properties are located in the vicinity of large cities, although mostly just outside their boundaries, along the largest communication routes and near motorway junctions.
Large facilities located in the area of the largest urban agglomerations, mostly 10–50 km away from city boundaries, with access to express roads and motorways. The main tenants of big-box warehouses are e-commerce companies, retail networks, distributors and logistics companies.
SBUs are smaller warehouses with the area from 500 to 5000 sqm. Such facilities feature warehouses and offices, and sometimes light production. This type of real property is mostly selected by the tenant who, except for perfect location, cares for visual and aesthetic qualities of the building. Small business units are located in the industrial urban districts located close to city centers.
The plots intended for manufacturing facilities are usually determined in detail in the local development plan. Complicated parameters and detailed requirements mandatory to construct this type of buildings limit the possibilities of land usage – not every plot meets the provisions for manufacturing facilities.
This type of building is intended for storing IT infrastructure, as well as processing and distributing data. It is characterized by very high electricity demand, and location far away from the main roads, but in a well-communicated area.
This is one of the most active investment property sectors. At the end of the third quarter of 2022, the total volume of office investments in Poland reached the level of 1.8 billion euro. Naturally, such investment projects are implemented in large cities, such as Warsaw, Wrocław, Kraków.
The demand for plots of land intended for the construction of large-area commercial halls, so-called retail parks, is still high. This type of investments are implemented throughout Poland, both within and outside of the boundaries of large cities.
The most important legal act which can help to determine the status of a plot is the local development plan. This document contains information which set forth the requirements applicable to the particular area. Pursuant to Article 4 item 1 of the Spatial Planning and Management Act, the local development plan provides for “determination of the intended purpose, deployment of public utility investments and identification of the development and its conditions for the land.” The local development plan not only sets forth what can be built on a particular land, but also describes the parameters, such as building height. The data on the actual status of the land plot can be found on the Internet or at municipality offices. If a real property is not subject to any local development plan and the investor plans to change its development manner, they can apply for a development conditions decision to be issued. The development conditions decision can be issued when several conditions are met, such as the presence of at least one adjacent plot accessible from the same public road, developed in a manner allowing for the determination of requirements for new development.
To fairly determine the price of an investment plot, you need to first answer the question: what part of the plot area can be used for an investment. This type of analysis will help to estimate the initial price, which will be appropriately specified in detail after the technical parameters determining the investment potential are established. The most important of them are set forth in official documents issued by the self-government bodies at level of municipality, poviat or voivodship (e.g. local development plan). Based on the available documents, the useable surface area can be calculated, which will provide the answer to the question asked in the first sentence. This is one of the parameters necessary to determine the value of a land plot. If a plot is subject to additional conditions (it is located in a restoration zone, the real property has been entered into the list of heritage sites, it is located in a downtown development area or infrastructural investments are planned nearby) or an environmental decision is required, more documents will need to be obtained. Using a specialist support to obtain a reliable and accurate valuation report is recommended.