Allocation of building rights
Maintain the ability to act for future generations by granting building rights
Actively promote residential development by granting building rights instead of selling land zones to ensure strategic, long-term viability for future generations.
You own strategic land reserves in construction zones that you do not want to use for your own projects in the medium or long term. But do you lack the resources for independent development?
To ensure that your land zones remain economically viable over the long term and complement your low-risk financial portfolio, granting building rights could be an attractive option.
Our experienced team is ready to assist and advise you on all specific issues related to building rights in order to find the optimal solution for your needs.
Thanks to our many years of experience as a valuation and consulting firm, we are regularly confronted with various concerns regarding the allocation of building rights for land, both by grantors and holders of building rights.
At Wüest Partner, you will receive support for all issues relating to building rights, from general advisory services to comprehensive transaction support.
Our expert team competently accompanies you through the entire process, starting with negotiations and ending with the conclusion of the contract. We also help you define and structure a building rights interest model and determine a building rights interest rate in line with the market.
Our goal is to work with you to develop a customized, transparent, flexible, long-term profitable, and, from a risk perspective, fair building rights contract. We advise you on all matters regarding your existing or planned building lease properties and develop the relevant basis for decision-making.
In addition, we provide long-term support in regularly reviewing and adjusting building lease terms during the term of the contract and at the time of reversion, using our extensive valuation and real estate expertise.
Different building rights models
The classic model
In the classic building rights model, the building lease charge is determined by applying a risk-adjusted interest rate to the derived land value. Adjustment mechanisms are then agreed in advance to allow building lease charges to be modified periodically or if framework conditions (e.g. interest rate environment, construction adjustments, rent restrictions) change significantly.
The Basel model
This is often referred to as a partnership model, as it is characterized by an equal partnership between the lessee and the lessor. Both parties share the risks and returns according to their value contribution: land value for the building rights grantor and investment in the building for the leaseholder. If the parameters change (e.g. net income, building value, or land value), the interest rate is adjusted.
The income-based model
In the income-based building rights model, the building lease interest rate is linked to the future development of rental income, as this can be measured objectively. Interest is paid on the property income. If the income increases or decreases, the building lease interest rate is adjusted, whereby downward hedging is possible.
Find out more about the various building rights models and their advantages and disadvantages.
The advantages of a good building lease agreement
Flexible
Adaptable to future developments.
Comprehensible
Still practical in 100 years.
Fair
Shared risks.
Simple
Simple constructs.
References
City of Dübendorf
Procedural and transaction support for allocation of building rights linked to a development vision incl. non-profit or socio-political goals. Support in determining the building lease interest model. Learn more.
City of Baden
Preparation of a building rights strategy paper, which regulates the handling of existing building rights and the granting of new ones, as well as the development of a model contract for building rights.
Various municipalities and cantons
Estimation of the land value for the adjustment of building lease contracts, taking their unique features (existing properties, affordable housing, life cycle and investment planning) into account.
Canton of Zurich/Divers
Individual consulting and evaluation of building lease contracts, including reversion compensation.
BWO
Compiling the study “Building rights under the magnifying glass” on behalf of the Federal Office for Housing (BWO). Read the study here in German or French.
Comprehensive solutions for the public sector
Building rights allocation
Support with all issues relating to building rights.
GIS Analysis
Detailed monitoring of regional market value developments through extensive data.
Sustainability
Comprehensive sustainability analysis and industry-leading digital solutions.
Valuation
Valuation of individual and special properties as well as real estate portfolios.
School planning
Determination of long-term space requirements using detailed student forecasts.
Real estate development
Comprehensive advice on the spatial development of your municipality based on sound data.
Strategy consulting
Sustainable value creation for your real estate assets through professional strategy consulting.
Appreciation tax
Assessment and calculation of appreciation tax for municipalities and cantons.
Affordable housing
Needs assessment, knowledge transfer, and advice on low-cost housing.
Population forecast
Look into the future using a standardized population forecast model.
