Owning a site with development potential is the start of a long sequence of decisions, and the first few cost the least and set the most. Most of the expensive mistakes in development are made before the first drawing: a scheme designed to the maximum envelope before anyone tested what it would cost, the wrong consultant appointed first, or a site held on numbers that were never checked.
Start with what you own
Before anyone designs anything, get the facts about the land together:
- the title, and anything registered on it (easements, covenants, restrictions)
- the zone and overlays in the Planning Property Report
- any existing permits
- the site's history, which tells you whether contamination is a risk
- access to services
None of this is expensive, and all of it changes what the site will carry.
Then test the yield and the numbers
The next question is what the site will realistically hold under the planning controls, and whether that stacks up. That means:
- a massing test against the controls
- a feasibility that sets the end value against the total development cost
- the margin, and the land value the scheme supports
This is the job of a Site Appraisal, and it takes weeks, not months.
Decide the strategy before the design
With the numbers in front of you, the choice is between developing, entering a joint venture or selling, with or without a permit. Each suits a different owner. Settle it before you commission design, because the right scheme for a sale is rarely the right scheme to hold.
Appoint in the right order
- A development manager first, to own the feasibility, the brief, the budget and the program.
- A town planner and an architect, once the strategy is set, to develop a scheme to that brief.
- A quantity surveyor early, so the scheme is costed before it is fixed.
- A surveyor, a geotechnical engineer and an environmental consultant, early, because basements, ground conditions and contamination move the budget.
- The application team: traffic, sustainability, landscape, waste and acoustic consultants, and wind and heritage specialists where the site calls for them.
- Later: structural, services and fire engineers, a building surveyor, a leasing or sales agent, and the builder.
Know what it costs and how long it takes
- Consultant fees run to about 7% of construction cost across a project, and a meaningful share is spent before a permit.
- Statutory costs (planning fees, building permit and cladding levies, headworks and utility connections) add around 2% of total development cost.
- Contingency: a sensible feasibility carries 7% of construction.
On a mid-size office project the program runs roughly:
- 18 months from site to permit through council
- 7 months of documentation and tender
- 20 months of construction
- four to five years from site to a completed, income-producing building
A recent project in Cremorne shows how long the planning stage can run: its first application went in in 2021, a 10-storey permit followed in 2022, and the 13-storey permit was issued in 2026.
Know the points where you can stop
There are five natural decision points:
- After the appraisal: does the yield on cost beat the rate the market will value the finished building at, by a healthy margin?
- Before the planning spend: is the brief fixed and the cost plan inside the feasibility?
- At permit: do the conditions change the numbers?
- Before signing a builder: is the tender inside budget, has the builder been checked, and is the funding in place?
- Before construction starts: are the lender's conditions met?
Stopping at any of these costs a fraction of stopping later.
A recent example
In August 2026 an owner-occupier asked Vettex to review five office sites in South Melbourne. None worked at the asking price:
- the yield on cost sat below the rate the market would value the finished buildings at
- the sites were too small to carry the fixed costs of a core, lift and basement
- a 20-car basement took $1.5–1.9M of value off every site
The land price was the smallest of the three problems.