Unlocking the potential of the property - The highest and best use (HBU) Analysis

The highest and best use (HBU) Analysis in real estate refers to the maximised value-added use for a property.

Key Focus:

• Strategic Use: Determines whether the site is best suited for residential, commercial, industrial, or mixed-use development and outlines the optimal component mix in terms of high-level area allocations.
• Physical and Legal Constraints: Evaluates what can physically and legally be done with the property.
• Market Opportunities: Considers market demand and trends to identify the most financially viable use. Market review of the best-suited real estate asset class, considering the market background, pricing trends, supply, and demand analysis. Developing financial assumptions, and projected financial statements for each potential use and the overall project.

Understanding the optimal use of your property is a strategic step towards maximising its value.

Considerations:

• Physically Possible: What can the site accommodate given its size, topography, access, etc.?
• Legally Permissible: What is allowed by regulations?
• Financially Feasible: Which potential use will generate the greatest financial return?
• Maximally Productive: Which use will maximize value?

Things to Consider

HBU analysis is a Strategic - High level analysis and is performed prior to a Feasibility Study which is focused on a specific project.

Role of the Project Manager

Communication, Organization, and Risk Management to ensure the project’s success. The roles shift from a more Strategic role in HBU, to a more Detailed & Technical role in Feasibility Study.

At UN!Que Project Solutions (UN!Q) we provide Pre-Contract and Post Contract Project + Design + Cost Management solutions for Real Estate + Construction Projects.