Most real-estate losses arise not from the purchase price but from the use decision: land that suits a retail centre is built out as residential towers, and land that supports higher density is consumed by a low-yield use.
A highest and best use study tests the available alternatives through four sequential tests: legal permissibility under municipal requirements and the master plan, physical possibility given location, area and services, financial feasibility comparing returns against costs, and finally maximum productivity, which determines the winning alternative.
We deliver the study with cash-flow tables and sensitivity scenarios and an explicit comparison of alternatives, so it can support an investment decision, underpin a valuation report or be presented to a financier.
Who this service is for
- Developers ahead of master-plan approval
- Owners of raw land and strategic sites
- Real-estate funds and institutional investors
- Government entities and endowments investing their assets
- Financial institutions assessing project finance
How we work
- 01
Reading site and regulation
Reviewing municipal requirements, the approved master plan and permitted build ratios.
- 02
Generating alternatives
Building a testable list of candidate uses rather than a single predetermined option.
- 03
The four tests
Legal permissibility, physical possibility, financial feasibility and maximum productivity.
- 04
Financial modelling
Cash flows, internal rate of return and sensitivity scenarios for each qualified alternative.
- 05
Recommendation
Naming the winning use with its justification, risks and the limits of reliance.
Frequently asked questions
How does this differ from a feasibility study?
A feasibility study tests one predetermined project; a highest and best use study starts with no preferred option and compares multiple alternatives to determine which deserves a detailed feasibility study.
Is the study suitable for presenting to a financier?
Yes, and we design it for that purpose: declared assumptions, sourced data, and sensitivity scenarios showing how cost, rent and occupancy shifts affect the return.
Does the study include a land value estimate?
It can. We issue the study standalone or paired with an accredited valuation report setting the land value under the recommended use, since we hold the real-estate valuation licence.