Project Overview
Client
Corporate landowner & major energy infrastructure operator
Property Type
Industrial development land & critical energy infrastructure site
Reason for Service
Compensation valuation for partial compulsory acquisition & temporary construction lease
Preston Rowe Paterson was instructed by King & Wood Mallesons, on behalf of AGL Macquarie Pty Limited, to assess the compensation payable for:
- The partial permanent acquisition of freehold land
- A temporary leasehold acquisition for construction purposes
- The potential impact of the acquisition on the residual holding
- Any applicable compensation under the separate heads of claim in section 55 of the Land Acquisition (Just Terms Compensation) Act 1991
- The use of the valuation as an independent basis for negotiations with Transport for NSW
The acquiring authority was Transport for NSW and the acquisition was required for the M1 Pacific Motorway extension to Raymond Terrace. The interests assessed comprised both permanent freehold and temporary leasehold interests.
The instruction was particularly complex because the land also formed part of the broader development context for AGL’s approved Newcastle Power Station Project. The valuation therefore required more than a conventional rate-per-square-metre assessment of the land being acquired. It required consideration of the acquisition’s relationship with the residual industrial land, access arrangements and the approved power station development.
Summary of Scope of Services
Our engagement involved delivering a comprehensive compulsory-acquisition and valuation advisory service comprising:
- Review of the Proposed Acquisition Notice, acquisition sketches, revised deposited plan and temporary lease documentation
- Identification of the permanent freehold acquisition, temporary lease area and residual holding
- Assessment of the site’s industrial and environmental zoning, flood-planning controls, access arrangements and development context
- Analysis of vacant and improved industrial land sales across Tomago and Heatherbrae
- Analysis of hardstand and industrial land rental evidence
- Assessment of market value, special value, severance, disturbance and potential changes in the value of the residue
- Consideration of potential injurious affection associated with the acquisition and altered access arrangements
- preparation of an independent compensation benchmark to assist negotiations with Transport for NSW
Asset Overview:
The parent holding comprised Lots 2 and 3 in DP1043561, providing a total land area of approximately 27.79 hectares. It occupied a prominent industrial position with extensive Pacific Highway frontage and secondary frontage to Old Punt Road, near the established Tomago and Heatherbrae industrial precincts.
The property included:
- A principal area zoned IN1 General Industrial
- A smaller separated component zoned C2 Environmental Conservation
- Approximately 365 m² of older improvements considered to have no contributory value in the context of future industrial development
- Flood-planning and bushfire considerations
- Registered easements
- Access, servicing and environmental matters relevant to the valuation
Parts of the property were affected by flood-planning controls and the holding was identified as bushfire-prone land. The report also identified several registered easements and noted the importance of services, access and environmental assumptions to the valuation conclusions.
A multi-layered valuation framework was applied to distinguish between the value of the permanently acquired land, the temporary occupation interest and any separate impact on the residual holding.
Permanent Freehold Acquisition
The direct comparison approach was adopted as the primary methodology. Comparable industrial land transactions in Tomago and Heatherbrae were analysed on a rate-per-square-metre basis.
Adjustments were considered for:
- Date of sale
- Land area and economies of scale
- Highway exposure
- Location within the industrial precinct
- Physical characteristics
- Access
- Flood affectation
Temporary Leasehold Acquisition
Industrial hardstand and land-rental evidence from Tomago and Heatherbrae was analysed to assess the temporary construction lease.
The adopted rate was applied to approximately 9,156 m² over the four-year occupation period, with the aggregate rental then considered on a present-value basis.
Residual Land and Injurious Affection
Preston Rowe Paterson separately considered whether the acquisition caused a compensable diminution in the value of the residual holding. This included analysis of the zoning, approved power-station project, motorway alignment, existing and proposed access, complementary industrial-development potential and highest and best use advice.
A before and after analysis was undertaken as a sensitivity and cross-check. The final assessment adopted a piecemeal direct comparison valuation of the acquired land, with no separate amount adopted for special value, severance or an increase or decrease in the value of the residue. Disturbance costs, including reasonable legal and valuation costs, remained to be determined.
This engagement demonstrates Preston Rowe Paterson’s expertise in:
- Compulsory acquisition and statutory compensation valuations for major infrastructure projects
- Valuation of permanent land acquisitions and temporary leasehold interests
- Assessment of severance, injurious affection and residual land impacts arising from compulsory acquisition
- Advising on complex projects involving transport, energy and essential infrastructure assets
- Applying robust valuation methodologies across large-scale industrial and infrastructure holdings
- Providing strategic property advice that assists clients in managing risk, protecting asset value and achieving equitable compensation outcomes
Approximately
9,156m²
Temporary lease area
Approximately
6.355ha
Permanent acquisition
Approximately
27.79ha
Parent holding
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