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A DIFFERENT KIND OF ADVICE

Chem Property gives property owners the same commercial perspective developers apply when assessing a site.

Our role

Our role is simple: to level the playing field by giving owners the same commercial perspective developers apply when assessing a site. Through developer-level commercial analysis and strategic advice, we help owners understand the true development potential of their property and navigate the development sales process with clarity, strategy and confidence.

Drawing on backgrounds in architecture, planning and development finance, together with extensive experience working alongside Sydney's leading developers on acquisitions and advising landowners and ownership groups on development sales, we understand how development opportunities are evaluated, structured and negotiated in the real world.

We know what drives developer demand, how value is created, and what separates an ordinary site from one that attracts serious developers.

What we are not

We are not a traditional real estate agency. We do not rely on broad public campaigns or list development sites on residential portals.

Instead, we work through a carefully curated network of credible, financially capable developers who are actively acquiring sites in your area. Our focus is not simply generating interest. It is identifying the right strategy, positioning the opportunity correctly, and connecting it with the right buyer to maximise both value and certainty of execution.

Whether you have been approached by a developer, are considering selling, or simply want to understand what your property may be worth in a development context, we are happy to provide an initial assessment and discuss your options.

SELLING TO A DEVELOPER

A practical guide to development value, residual land pricing and the structures commonly used when selling a property to a developer.

Understanding development value

Selling to a developer is fundamentally different from selling to a standard residential buyer. Residential purchasers usually assess a property based on size, location, finishes and street appeal. Developers assess what the land can become.

They look at zoning, planning controls, allowable density, height limits, frontage, access, topography, construction feasibility and end sales values. This is why two visually similar houses on the same street can have dramatically different values to a developer.

Why developers sometimes pay more

Where a property has genuine redevelopment potential, developers may pay substantially above residential value. This uplift can become even more significant where neighbouring properties can be amalgamated into a larger development site.

How developers assess sites

Developers usually undertake a residual land value assessment. They work backwards from the expected value of the completed project, then deduct every cost of delivering it, leaving what is left over for the land itself. That leftover figure, not the owner's asking price, is what actually sets the ceiling on a developer's offer.

Transaction structures

Development transactions are rarely simple cash purchases with short settlements. Developers commonly require due diligence periods, option agreements, extended settlements and staged deposits so they can assess risk and progress planning before fully committing.

For owners, the structure can be just as important as the headline price. A higher price with excessive conditions or uncertainty around the quality of the developer may produce a weaker outcome than a slightly lower but cleaner transaction with a reputable buyer.

How the transaction typically unfolds

Once a developer is genuinely interested, the process usually follows a fairly consistent sequence, even though the specific terms differ from deal to deal.

The developer will typically issue a heads of agreement or letter of offer. This sets out the key commercial terms at a high level, price, structure, deposit and timing, and is a summary of what the formal transaction documents will contain, not the documents themselves. Once the owner signs it, the due diligence period usually begins.

During due diligence, the developer's consultant team tests the assumptions behind their offer, planning controls, yield, construction costs and site conditions, to confirm the numbers still stack up before they commit. This period genuinely benefits both sides. Uncovering a problem early, with as little time and money spent as possible, is in everyone's interest.

Due diligence is usually exclusive, meaning the owner agrees not to negotiate a sale with anyone else while it runs. In exchange, the developer gets the confidence to spend real money on consultants and commit resources to the site, knowing they can proceed on the agreed terms if their due diligence checks out. Depending on the complexity of the site and the work required, due diligence periods commonly run anywhere from 30 days to a few months.

It is also during this period that the owner's solicitor and the developer's solicitor begin negotiating the option deed and the contract of sale in parallel with the due diligence work. If everything checks out, the parties proceed to exchange, typically into an option agreement, and the sequence below begins.

Deposits

The deposit paid in a development transaction, often referred to as the option fee, is rarely paid as a single lump sum. It is far more common for it to be released in tranches across the option or due diligence period.

A typical structure sees around 5% of the price paid in total, split into stages such as 1 to 2% on exchange, a further 1 to 2% at the midpoint of the option period, and the balance tied to a milestone such as development approval or expiry of the option. Paying the full deposit upfront is possible, but less common, since developers generally prefer to release funds in line with their own risk being resolved.

If a developer has already approached you, get in touch for a free site assessment.

UNDERSTANDING OPTION AGREEMENTS

A detailed guide to call options, put and call options, the contract of sale, who drafts each document and the commercial terms that materially affect owner risk.

What an option agreement actually does

An option agreement, sometimes called an option deed, is one of the most common structures developers use to secure a development site. Rather than buying the property outright on exchange, the developer pays for the right to buy it within an agreed timeframe, at a price that is fixed today.

The owner who grants that right is called the grantor. The developer who receives it is called the grantee. These terms appear throughout the option deed, so it helps to know which side of the transaction each one refers to before reading the rest of the document.

Why developers use option structures

Development sites carry substantial upfront risk before a single brick is laid. A developer is rarely in a position to pay top dollar and settle within a standard 42 or 90 day contract, because the price they can justify depends on planning outcomes, feasibility and funding that are not confirmed yet. An option gives them time to de-risk the project while the owner's price is already locked in.

The option period allows a developer to:

• Lock in today's purchase price regardless of how the market moves before settlement
• Coordinate architects, planners and other consultants
• Negotiate with neighbouring owners to amalgamate the site
• Lodge for and secure development approval
• Secure debt and equity funding
• Get the project construction ready
• Meet any pre-sale hurdles their financier requires before the project can begin

In exchange for this flexibility, developers will often pay a materially stronger price than they could justify under a short, unconditional contract.

Call options and put and call options

A standard call option gives the developer, the grantee, the right, but not the obligation, to complete the purchase. If the developer does not exercise that right within the agreed option period, the owner simply keeps the property and retains the security deposit paid for the exclusivity, with no obligation to sell.

Call options are used most often where planning certainty is genuinely lower, for example before a rezoning is confirmed or if there is more complexity or risk around a particular site. In that setting, the call option gives the developer sufficient protection that they are not forced to settle on a site whose value is largely underpinned by an approval they do not yet have. It works well where the owner is comfortable trading that certainty for the possibility of a materially more lucrative price.

Where the pathway is more straightforward, for example a clean site with confirmed planning controls, the deal generally warrants a more binding structure, which is where a put and call option comes in. Under a put and call structure, the developer's call option is exercisable first, within the timeframe set out in the deed. If the developer does not exercise it, the owner then gains a put option, exercisable within a further agreed window, which compels the developer to complete the purchase anyway. If neither option is exercised, the agreement simply expires and the owner keeps their property.

Because a put and call option gives the owner a genuine fallback right rather than relying entirely on the developer's willingness to proceed, it is generally considered as a stronger structure for a vendor. A call option alone is not necessarily a red flag, but owners should understand that it does not carry the same protection, and should weigh it against the price and certainty the developer is offering in return.

Option fees and the security deposit

Because the owner's property is effectively taken off the market for the length of the option, often many months or longer, the security deposit compensates them for that exclusivity. It is typically structured as a percentage of the purchase price, commonly in the order of 1 to 5%, and released in tranches across the option period rather than paid as a single lump sum. If either the call or put option is exercised, this deposit converts into the deposit payable under the contract of sale. Owners should treat the size and staging of the security deposit, and whether any part of it is refundable, as one of the most important commercial terms when considering an offer.

The contract of sale is fixed before you sign

This is the detail owners most often miss. A complete contract of sale, covering the price, deposit, settlement date, special conditions, easements and any other terms of the eventual sale, must be annexed to the option deed itself. That contract is not drafted later once the developer decides to proceed. It is negotiated and agreed upfront, before the option period even begins, and it is that exact contract which becomes binding the moment either party exercises their option.

In practice, this means owners are negotiating the full terms of their eventual sale at the very start of the process, not months or years later when the developer is ready to settle. Every special condition buried in that annexed contract, not just the headline price in the option deed, deserves the same scrutiny as the deed itself.

Who drafts the option deed and the contract of sale

Drafting responsibility is split between the two solicitors, consistent with standard NSW conveyancing practice. The developer's solicitor prepares the first draft of the option deed, because the developer is the one requiring the specific conditions, timeframes, due diligence rights and nomination clauses the structure is built around. That draft is provided to the owner's solicitor for review and negotiation before either party signs.

The contract of sale annexed to the option deed is prepared the other way around. Under standard NSW practice, it is the vendor who is required to issue the contract of sale, including the statutory disclosure documents required under the Conveyancing Act 1919 (NSW), such as the title search and planning certificate. So the owner's solicitor drafts the contract of sale and provides it to the developer's solicitor for review. The two documents are then negotiated together, because the terms sitting in the contract of sale are just as binding as anything in the option deed itself.

Owners should be independently represented by a solicitor experienced in development transactions, not a general conveyancer, before signing either document.

Balancing risk and value

Developers often pay higher prices when they are given flexibility through an option structure, because it lets them de-risk a project before fully committing. Owners are effectively trading certainty of timing for an improved commercial outcome, so the agreement, and the contract of sale sitting behind it, must be negotiated to protect the owner's long-term interests, not just accepted at face value.

If you have been offered an option agreement, or a developer has raised one as a possible structure, get in touch for a free site assessment to know if what is being offered is consistent with the market or if it can be improved.

SELLING TOGETHER WITH YOUR NEIGHBOURS

A guide to site amalgamation, collective sales, strata renewal and how neighbouring owners can create a more valuable development opportunity.

What is an Amalgamation?

An amalgamation is the process of combining two or more adjoining properties into a single larger development site.

By consolidating land, owners can often unlock significantly stronger development outcomes and materially increase the value of their property.

For example, three neighbouring houses may individually have limited redevelopment potential, but together could form a site large enough to accommodate a boutique apartment project. This creates a fundamentally different opportunity for developers and can result in a substantial uplift in value.

Larger consolidated sites are often more attractive because they may allow developers to:

• Create more efficient building designs
• Improve site access and circulation
• Achieve stronger apartment layouts and better basement efficiency
• Deliver larger landscaped or communal areas
• Gain greater design flexibility and improved planning outcomes

Collective Sales in Strata Buildings

Where a strata building has redevelopment potential, developers may seek to acquire the entire building through a collective sale.

In these situations, developers are not simply purchasing individual apartments. They are acquiring the underlying land and the future redevelopment opportunity attached to it.

In NSW, the strata renewal process provides the legal framework that allows owners within a strata scheme to sell the building collectively. Under the Strata Schemes Development Act 2015 (NSW), a collective sale can proceed where at least 75% of owners, by unit entitlement, support the proposal.

While the legislation permits a 75% threshold, in practice, achieving full alignment between owners is highly advantageous. A fully coordinated group typically creates a smoother transaction process, reduces legal and commercial friction, and provides developers with greater confidence and certainty.

How Sale Proceeds Are Typically Distributed

In strata schemes, the total purchase price is usually split by unit entitlement. In amalgamations involving adjoining houses, it is usually split by land size. In our experience, roughly half of the collective sales we are involved in settle on one of these default splits without further negotiation.

The other half need a more nuanced approach. This tends to happen where unit entitlement no longer reflects the true market value of the apartments, or where land size alone does not produce a split every owner considers fair. In those cases, we work collaboratively with the owners to reach an outcome that works for the group as a whole.

A hybrid approach some owners use

One structure we have seen work well on a number of deals is a hybrid model. Each owner first obtains an independent valuation of their property at its current, individual market value, as if it were being sold on the open market on its own. Everyone is paid that amount first.

The remainder of the sale price, the uplift created by combining the sites into a single development opportunity, is then split equally between the participating owners. The logic is straightforward: everyone needs everyone else for the amalgamation to work, so the additional value that amalgamation unlocks is treated as a shared outcome rather than weighted toward whoever happens to hold the larger or more valuable lot.

Owners tend to view this as an equitable mechanism. It rewards each party for what their property is genuinely worth on a like for like basis, then treats the development upside, the actual reason the sale is worth pursuing together, as something everyone should share in equally.

The Importance of Alignment Between Owners

Owners often have different expectations, financial circumstances, timeframes, or emotional attachments to their property. Without alignment, even highly valuable development opportunities can become difficult to execute.

We have seen great deals die before they even got off the ground due to misalignment between owners.

A successful sale involving multiple owners requires:

• Clear and transparent communication
• Realistic expectations
• Strong management
• Written alignment between owners on timing, strategy and how the price will be split

Developers place significant value on certainty. Where owners negotiate independently or present conflicting positions, developers perceive greater execution risk, which can impact both pricing and appetite to proceed.

Conversely, when owners are aligned and a site is presented as a coordinated development opportunity, developers are often willing to pay stronger prices because the pathway to execution is clearer, more efficient, and more predictable.

Chem Property works with ownership groups to ensure there is alignment from the very beginning and maximise the chances of a successful development sale. Reach out to discuss your property.

THE MYTH OF GOING TO MARKET

A guide to why public campaigns are not always the strongest path for development sites, and why controlled off-market processes can create better alignment.

Why public campaigns often miss the mark

Traditional residential campaigns are designed to create emotional competition among lifestyle buyers. That strategy works well for standard homes because value is often subjective.

Development sites operate differently. Their value is commercial and driven by planning outcomes, yield, build costs, finance structures and risk assumptions. Public exposure does not change those fundamentals.

The strength of curated off-market campaigns

Some of Sydney's strongest development site transactions have occurred entirely off market. The difference is not necessarily broader demand. It is control.

Sophisticated developers often pay aggressively when they believe they are receiving:

• Exclusive access
• Limited competition
• Vendor alignment
• Confidentiality
• A clean pathway to settlement

Why exclusivity creates value

Strong developers value certainty and access. Where they believe a site is genuinely scarce and tightly controlled, they are often willing to move faster and price more aggressively.

Over-exposure can erode perceived value and create unnecessary complexity, buyer fatigue and friction.

Development sites require strategic positioning

High quality development opportunities should be treated as strategic assets. The strongest outcomes usually occur when the opportunity is carefully curated, the ownership group is aligned, the information flow is controlled and negotiations are professionally managed.

Sophisticated transactions are rarely about simply exposing the property to as many people as possible. The objective is not maximum noise. It is maximum strategic alignment between the site and the right buyer.

BEFORE OR AFTER REZONING?

A practical decision framework for owners weighing up timing, certainty and the risk of waiting until every competing site is visible to the market.

The real question is not just price. It is timing, certainty and control.

When a rezoning, master plan or planning reform is underway, many owners assume the safest move is to wait until the controls are finalised. That can be right in some cases, but it is not always the strongest commercial strategy.

The period before final planning certainty can be valuable because developers are still trying to secure the best sites ahead of the broader market. Owners may be able to negotiate early, structure a flexible agreement, or align with neighbours so they are ready to move the moment the final controls are released.

The key is understanding which of the three groups you fall into.

Group 01: Owners who enter an agreement before rezoning

This path can make sense where there is enough planning momentum to support developer interest, but not so much public certainty that every owner and every competing site has already repriced.

The advantage is that you may be able to secure a strong developer early, create competitive tension before the market becomes crowded, and lock in a commercial pathway while others are still waiting.

The important point is structure. Early agreements do not need to be blunt fixed-price deals. They can be structured with mechanisms that respond to the final planning outcome, including uplift formulas, price adjustment bands, floor pricing, staged deposits, planning milestones, option periods and protections if the final controls differ from expectations.

• Pros: early developer commitment, reduced market noise, ability to negotiate structure before everyone else is competing for attention, potential to secure a credible buyer ahead of planning certainty.
• Cons: if structured poorly, owners may cap their upside too early or accept planning risk without adequate protection.
• How Chem can help: assess whether the proposed pricing reflects realistic development value, negotiate flexible commercial terms, test developer calibre, and structure the agreement so owners are protected if the final planning outcome moves up or down.

Group 02: Owners who do not sign yet, but get aligned

This is often the most underused strategy. Owners may not be ready to commit to a sale before final controls are known, but they can still do the important work early.

That means understanding the likely development potential, speaking with neighbours, resolving internal expectations, agreeing on a price framework, and preparing documentation so the ownership group is ready to move quickly once the planning picture sharpens.

When final clarity arrives, the groups who are already aligned are usually ahead of the market. They can present developers with a cleaner, more credible opportunity while other owners are still trying to organise meetings, resolve disagreements and work out what their site is worth.

• Pros: preserves flexibility, avoids committing too early, positions the owners to move quickly, reduces execution risk and often improves developer confidence.
• Cons: without discipline, alignment can drift and owners may still miss the strongest window if no clear process is managed.
• How Chem can help: coordinate owners, assess amalgamation potential, prepare a commercial strategy, build consensus around value and timing, and position the site so it is ready for a controlled developer process when appropriate.

Group 03: Owners who wait and do nothing

This is the group that often feels safest, but can end up in the weakest position.

By the time controls are finalised, the market may already understand the supply story. Developers can compare your site against many other newly unlocked sites. Owners may also face more competition, less urgency, and greater scrutiny around feasibility, construction costs, contributions and funding.

Waiting is not automatically wrong. The risk is waiting without strategy. Passive waiting usually means owners are reacting after the market has already moved rather than shaping their position before it does.

• Pros: maximum planning clarity before committing, less ambiguity around what can be built, and a clearer basis for valuation.
• Cons: more competing sites, less first-mover advantage, slower owner coordination, and the possibility that developer appetite weakens once the true level of supply becomes obvious.
• How Chem can help: even if you choose to wait, we can help you avoid waiting blindly by monitoring planning progress, assessing likely developer demand, and preparing your site or ownership group before the market becomes crowded.

The practical decision framework

The right answer depends on your site's planning probability, uniqueness, ownership structure, neighbour alignment, developer demand and the quality of terms available now compared with the likely market after rezoning.

For some owners, the best move is to secure a structured early agreement with upside protection. For others, it is to get aligned, document the strategy and wait for the next planning milestone. For others, waiting may be appropriate, provided it is an active strategy rather than a default position.

Chem Property can help owners compare these pathways, understand the commercial trade-offs and choose a strategy that protects both value and certainty.

MOSMAN MASTER PLAN 2026

A practical owner guide to the proposed Mosman planning changes, developer interest, timing risk and how to assess your site before controls are finalised.

What owners should understand

Mosman is navigating one of its most significant planning shifts in decades. The Low and Mid-Rise Housing Policy has already changed the way developers assess suitable sites, while the proposed Mosman Masterplan may refine where future density is supported.

For owners, the key question is not simply whether your property is in or out of a proposed boundary. The more important question is how developers are likely to price your site against the final controls, neighbouring sites, lot size, frontage, slope, access, heritage and amalgamation potential.

This guide helps owners:

• Understand how the proposed planning changes may affect their property
• Assess whether their site currently attracts developer interest
• Explore amalgamation opportunities with neighbouring properties
• Consider timing, value and negotiation strategy before new controls are finalised

As the Mosman Masterplan evolves, owners who understand their current and future position will be better placed to make an informed decision, rather than reacting after the market has already repriced the opportunity.

WOOLLAHRA STATION REZONING

A practical guide for owners in and around the proposed Woollahra and Edgecliff station catchment.

What the rezoning could mean

The NSW Government is undertaking a state led rezoning around the future Woollahra and Edgecliff train stations to facilitate up to 10,000 new homes. The proposed rezoning spans an 800 metre radius around the revived Woollahra Station.

For landowners within this catchment, the opportunity is not just future density. It is timing, positioning and understanding how your property compares to the significant number of competing sites that may be unlocked across the precinct.

This guide helps owners:

• Understand the realistic development potential of their site
• Identify amalgamation opportunities to enhance value
• Gauge current and future developer demand
• Time the sale to maximise value
• Navigate negotiations with developers from a more informed position

As the Woollahra Station rezoning progresses, early clarity can help owners understand whether their site should be held, positioned, amalgamated, or taken to a targeted developer process before the broader market becomes crowded.

HOUSING DELIVERY AUTHORITY (HDA)

A practical owner guide to the NSW Housing Delivery Authority pathway, HDA site qualification, State Significant Development, owner alignment, EOI strategy and developer delivery capability.

What is the NSW Housing Delivery Authority pathway?

The Housing Delivery Authority, commonly referred to as the HDA, is a NSW Government pathway for major residential projects that can deliver meaningful housing supply and warrant consideration as State Significant Development.

Through the HDA pathway, an Expression of Interest, or EOI, can be considered for a state led assessment pathway. If the proposal is suitable, the HDA may recommend that the Minister declare the project State Significant Development, commonly referred to as SSD. For owners, this means a strategic site may have a pathway beyond the ordinary local council planning process, but only where the planning case, commercial case and delivery case are strong enough.

Criteria

Why the HDA matters for owners

For owners of strategically located sites with sufficient scale, the HDA may be a viable pathway to unlock value that is not available under the existing controls. That value may come from a combination of a larger housing yield, a stronger planning pathway and a clearer development strategy.

The HDA pathway is relevant where a site can support significant housing supply, has a strong planning argument, and a credible developer with the funding, experience and capability to deliver the project.

What types of sites may suit the HDA pathway?

• Strategically located land near centres, transport, services, jobs or major roads
• Underutilised sites where the existing planning controls do not reflect the site potential
• Amalgamated sites or ownership groups that can support a meaningful housing outcome
• Sites capable of delivering significant housing supply, generally 100 or more homes in Greater Sydney
• Projects with a realistic feasibility case, clear planning logic, infrastructure support and credible delivery capability

The HDA is not just a rezoning wish list

A strong HDA strategy needs to show more than a desire for additional height or density. The proposal needs to demonstrate strategic merit, housing supply, feasibility, design logic, infrastructure capacity, site suitability and a realistic pathway to delivery.

Owners should not assume that land size, planning uplift or developer interest is enough. A proposal that looks attractive on paper can still fail if the yield is not achievable, the site has unresolved constraints, the planning argument is weak, the ownership group is not aligned, or the project cannot be delivered by a credible developer.

This is where Chem Property sits in the process. We help owners turn potential uplift into a properly tested strategy, then connect the opportunity with the right developer at the right time.

How Chem Property can assist

These are the five key ways we help owners assess, structure and progress a potential HDA opportunity.

Considering the HDA pathway?

If your site may have the scale, location and planning logic to support an HDA strategy, the first step is not to lodge an EOI. The first step is to understand whether the opportunity is real, what value may be created, what risks need to be resolved and which developer is best placed to deliver it.

Speak with Chem Property before progressing the pathway. We can help assess the site, coordinate the owners and shape a clear strategy so the opportunity is properly tested before any major decisions are made.

The bottom line

The HDA can be a powerful pathway for the right site, but it should be approached carefully. The strongest opportunities are usually the ones that combine planning merit, owner alignment, commercial feasibility and a credible developer who can actually deliver.