Due diligence on a development site: what to check before you commit
Subtitle: A practical checklist for Gold Coast and South East Queensland development sites, from zoning to exit
Canonical link (under “Advanced settings”): https://georgeboulos.com.au/insights/development-site-due-diligence-gold-coast-seq/
Topics: Property Development, Real Estate, Gold Coast, Land Development, Australia
By George Boulos, Founder & Director of Boleyn Capital, Gold Coast
Get George Boulos’s stories in your inbox
Join Medium for free to get updates from this writer.
A development site can look perfect from the street and still hide problems that make a project unworkable. On the Gold Coast and across South East Queensland, the difference between a good site and an expensive mistake is usually found in the due diligence, before you commit. I’m George Boulos, and I work on land development opportunities across SEQ, often securing sites through option agreements. Here’s the checklist I’d want anyone to work through before buying, or exercising an option over, a development site.
Start with the planning scheme
Every site sits under a local planning scheme, such as City Plan on the Gold Coast. The scheme sets the zone, what can be built, and how the council will assess an application. Check:
- Zoning. Does the zone support the use and density you have in mind, or would you need a more difficult, impact-assessable application?
- Overlays. Flood, bushfire, landslide, koala habitat, environmental significance, heritage and airport overlays can all reduce the developable area or add conditions.
- Height and density limits. These decide how many lots or dwellings the site can realistically yield.
A town planner’s early advice is often the best money spent in the whole project.
Check the title and anything registered on it
Order a current title search and read it closely. Look for easements (for drainage, sewer or access), covenants, existing mortgages and any other dealings that could restrict what you can do. An easement running through the middle of a site can change the whole layout.
Services and infrastructure
A site needs water, sewer, stormwater, power and road access, with enough capacity for what you plan to build. Find out where the connection points are, whether they have capacity, and who pays for upgrades. Also budget for the infrastructure charges councils levy on new development in Queensland. These costs can be substantial and are easy to underestimate at the feasibility stage.
The physical site
- Survey. Confirm boundaries, area, levels and any encroachments.
- Geotechnical. Soil type and rock affect earthworks and foundation costs.
- Contamination. Past uses such as farming, fuel storage or filling can leave contamination. Search Queensland’s Environmental Management Register and Contaminated Land Register, and get a site assessment if there’s any doubt.
- Vegetation and environment. Protected vegetation, waterways and wildlife habitat can limit clearing and layout.
- Cultural heritage. Queensland law places a duty of care on landowners and developers in relation to Aboriginal cultural heritage, so check early whether it’s relevant to the site.
Common pitfalls
A few issues catch people out more often than they should.
- Council speed. Not every council moves at the same pace. Approval timeframes can vary a lot between councils, and even between assessment teams within the same council. Some turn applications around quickly, while others work slowly or largely remotely, and every extra month adds holding and finance costs and pushes out your timeline. Before you commit, ask local planners and consultants how that council is performing right now, and build its track record into your feasibility and option period.
- Stormwater basins. Detention, bioretention and water quality basins are often required, and they can add costs you didn’t plan for. Upfront, a basin can take up land that would otherwise be lots, reducing yield, and it has to be built. After that, there are ongoing costs such as filter media replacement, sediment removal and plant upkeep through the maintenance period before handover to council, and sometimes beyond through a body corporate. Ask your civil engineer about stormwater requirements early, not after the layout is fixed.
- Tight timelines and the wrong contractors. Always allow extra time. Approvals, weather, authority sign-offs and services connections rarely run exactly to plan, so build a buffer into your program and your finance. Use experienced civil contractors who have delivered similar subdivisions locally. They know the council’s standards and the inspections, and they spot problems before they become expensive rework.
Run the numbers honestly
A feasibility study brings all of this together: likely yield, construction and civil costs, consultant fees, infrastructure charges, holding and finance costs, sales values and a contingency. If the project only works when every assumption goes your way, it doesn’t really work. Allow for time as well as money, because approvals and construction rarely run to the original timeline.
Know your exit and your timeline
Before committing, be clear on how the project ends: selling approved lots, selling the site with approvals, completing a build, or bringing in a joint venture partner. Make sure your contract or option period gives you enough time to finish due diligence and, where needed, lodge and progress an application before you have to pay the full price. That breathing room is one of the main reasons developers use option agreements. I explain how they work in How land option agreements work.
Build the right team
Good due diligence is a team effort. Most projects need a town planner, surveyor, civil engineer, solicitor, accountant and, depending on the site, environmental and geotechnical consultants. Involve them early, while it’s still cheap to walk away.
Talk it through
Thorough due diligence won’t remove every risk, but it turns unknowns into numbers you can plan around. If you own land with development potential, or you’re weighing up a site and want to talk it through, get in touch.
This article is general information only and isn’t financial, legal, planning or tax advice. Get independent professional advice for your circumstances.
Originally published at georgeboulos.com.au/insights/development-site-due-diligence-gold-coast-seq
George Boulos is a Gold Coast based finance and property professional, Founder & Director of Boleyn Capital, and works on land development opportunities across South East Queensland.
