Urban land appraisal

Geographic location is the primary factor in any appraisal. Land located in the city center or in a neighborhood with high demand, well served by public transportation and with easy access to services such as educational, health and commercial centers, will achieve higher prices. On the other hand, peripheral areas or areas with poor infrastructure tend to have lower values. In addition, qualitative aspects such as safety, cultural offerings and the presence of parks or green areas contribute to improving the perception and demand for land.

Current urban planning regulations, set out in the General Urban Development Plan (PGOU) of each municipality, define the zoning -residential, tertiary, mixed or industrial- and establish the occupancy and buildability coefficients. A change in the planning, such as a change in use or an increase in the buildable ceiling, can multiply the value of the plot significantly. For this reason, the approved appraisal company must verify not only the current situation of the land, but also possible modifications pending approval.

The overall size of the plot influences its development potential: large plots allow for larger projects, while very small plots may be less attractive to developers. The geometry of the land (regular, rectangular or irregularly shaped) affects project optimization and associated costs. Likewise, slope and topography determine earthmoving requirements: flat land reduces costs, while sloping or steep slopes make construction more expensive and may condition specific uses.

Building density, measured in square meters or units per hectare, and maximum allowable height limits are determining factors in the economic exploitation capacity. Land with a higher buildable area gives the developer a higher number of buildable meters, which translates into a higher appraised value. The appraiser must calculate the building potential according to the regulations and, if necessary, estimate the cost of any necessary licenses or reparcelling.