Commercial Property - Compulsory Purchase Issue

[obiwonkeyblokey]

Question.

I have identified a property to purchase ( an office) and we are in the process of having the survey and valuation done.

Today I found out from a source ( a very reliable one) that there is a plan to develop a certain part of Bristol and that the third phase of that will involve a compulsory purchase of the office building I intend to buy in.

This could take place in 2008 / 09 and as yet planning permission has yet to be approved, although as a council / local authority / high profile project, planning will not be a problem for them.

Should I continue with the purchase knowing about this and gambling on making money from the compulsory purchase, bearing in mind the upheavelt at would be requireed to the business or should I walk away?

Generally do these things have a habit of owrking out infavour of the property owner financially?

any advice / experiences gratefully received.

thanks

[The Londoner]

obiwonkeyblokey said:

Generally do these things have a habit of owrking out infavour of the property owner financially?

No! You may also have problems raising money for the purchase unless you are funding 100% yourself because this possibility will no doubt come out in pre-contract enquiries.

[pdV6]

My dad eventually did come out on top in a compulsory purchase but it was a long and hard road and not a little luck was involved (plus many hours of billable work by his solicitor).

[obiwonkeyblokey]

The Londoner said:

obiwonkeyblokey said: Generally do these things have a habit of owrking out infavour of the property owner financially? No! You may also have problems raising money for the purchase unless you are funding 100% yourself because this possibility will no doubt come out in pre-contract enquiries.

It wont show on the survey or valuation as no plans have been submitted yet, howwver since my original post I have spoken to the Project Manager responsible and he has confirmed that the intention is there to do the CPO however in their plans it could be 6yrs + away.

confusing

[UpTheIron]

Forget about the CPO for a minute:

- Would you buy the property knowing you had to move out again in around six years time?
- Does it have enough going for it that it is better than any of the alternatives?

If yes to those, because of the seemingly likely CPO:

- Would you still buy it knowing that you will be forced to sell at a time not of your choosing (who knows what the property market will do?).
- Are you happy to accept bottom dollar when the CPO comes in?
- Are you prepared for a long (and possibly expensive fight) to get a decent price?
- Are you likely to be in a position where you might have to sell after 3 / 4 / 5 years, by which time the CPO likelihood may be common knowledge?


IMHO, unless the property has something really special going for it, or you are getting it really cheap, then I would look elsewhere.