An assembly is the end result of purchasing various smaller parcels of property to merge them into one large land parcel or property.
A property assembly is a highly complicated transaction to perform! It requires high levels of patience, deal making abilities, savvy and pragmatism – which are not normally found together. It’s the CRE equivalent of herding cats.
Assemblies are normally triggered by land parcels being assigned greater zoning rights according to an updated spatial development framework. For example, land parcels may have only been allowed to build properties 3 stories above natural ground level, and with a maximum floor to area ratio (FAR) of 1.2. If the properties were accorded super bulk rights, the height restriction may be lifted to 20 stories, with a FAR of 15.
This makes the “air above the land” more valuable. It enables developers, subject to subject to demand and feasibility, to value properties on a “bulk value per square meter” basis. This Thus developer are incentivised to pay a premium for the land.
Famous examples of successful CRE assemblies in South Africa:
- Menlyn Maine in Pretoria – this previously used to be comprised of 104 residential properties, covering 21.5 hectares of prime land
- The current premises of Sasol and Bidvest Bank by Alchemy, in Sandton
- The aggregation of smaller land parcels by Growthpoint to build Discovery’s head office
An image of Menlyn Maine’s successful assembly is below: