Thursday, May 29, 2014

Land valuation weirdnesses revisited

A positive report at the Cairns Post this week on development proposals for Cairns including what would appear to be a very high density unit development: Deputy Mayor outlines spate of new projects for Cairns CBD

Singapore’s Aspial Corporation’s $200 million project involving seven towers (six residential and one commercial, with 1500 units) in Spence St behind the police station and courthouse.
Aspial Corporation bought the 24,109sq m Spence St property for $18.9 million this year.
At the time the company said it was planning a “mega-integrated development’’.
Chief executive Koh Wee Seng said the land would be used for a mega-integrated development with about 111,520sq m of residential units and offices.

This is the vacant land opposite Cairns Central on Spence St which had been subject to development proposals from HS Vision as far back as 2007 with their most recent proposal including a Woolworths: Singapore corporation buys vacant land in Cairns CBD for more than $18 million after HS Vision receivership. Aspial have been very active in Australia recently including a high profile acquisition at Melbourne's Southbank

However with property valuations still freely available from the V-G including the excellent Globe system which operates via Google Earth I found the official land valuation rather interesting:

81-83 SPENCE ST, CAIRNS CITY QLD 4870408112942.411 HA
SV $1,000,000 SV $1,000,000

This is an extreme difference between the land valuation and this recent transaction for what is vacant land supposedly equivalent to the V-G valuation. Also anomalous with surrounding valuations. The adjacent unit blocks on Spence carry a land value of $653 per m2. Across Spence St Cairns Central is $360 per m2 for 9.429ha. Other side of the rail tracks a 1.4ha block is $187 per m2. The 2.41 ha of this land is valued at just $41 per m2 while the buyer has paid more than $700 per m2. Perhaps they have left out a zero or something?

All these blocks are in close adjacent proximity and subject to the exact same land use zoning and building height code (P2=30m). Perhaps there is some historical reason or characteristic of the land otherwise these variations don't appear to make sense on my understanding of the principles of land valuation?

Note: The land tax estimator at the office of State Revenue provides the following numbers:

Land value          Land tax
$  1,000,000        $  12,500
$18,000,000        $335,000

Somebody tell Mr Strongchoices!

Council Links: Planning for Districts; Overlay Codes; Building Height Overlay
Valuer-General: About statutory land valuations in Queensland

Previous post: Valuation weirdnesses and Yorkeys Knob

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