Pre Mixed Concrete and Asphalt Plants
These specialist assets can often in CBD locations include a premium for both their planning consent, EPA licensing and specialised site improvements all of which run with the land. Due to the processes involved the sites are commonly identified as hazardous sites, and need to be distinguished from values of non hazardous sites. In reality the sites can be worth more than a non hazardous site due to the special circumstances involved but this may not be reflected by a non specialist valuer. There may well be pollution and contamination issues involved, that have a detrimental impact on the value of the site, and it is therefore important that these assets are considered by an experienced valuer who understands all the issues.
In other circumstances, where a plant is located at a quarry, then there can be a very low or minimal rent applied, because the quarry has a supply agreement with the plant. Supply agreements can be difficult to analyse but are also commercially sensitive and are rarely made available for consideration.
It is becoming more common for Environmental Impact Statements (EIS) to be carried out in relation to new sites. It is often the cost of obtaining the EISs that add value to existing sites. In addition there are usually specialised site improvements for aggregate loading and storage, conveyor systems, cement / asphalt silos, wash out bays, settlement ponds, as well as for the batching plant itself. There needs to be a good understanding of the nature and costs of these improvements to properly reflect values.
The location of both pre mixed and asphalt plants are paramount to their success. The plants operate on radials and therefore have a limited market within their determined area. However a pre mixed plant that benefits from the CBD within its radials would be able to compete for large volume contracts and sites within this location would expect a premium. For asphalt plants the premium location would be within or near to growth areas where new roads are required, but also location to busy motorways as they require ongoing maintenance and re-surfacing.
Often the key to success involves the market share an operator has within their radials. Too much competition in a given area usually involves lower margins and a slimmer chance of success.
Other factors that determine the success of these operations involve the location of sources of cement or bitumen, course and fine aggregates. Whether your buying or selling contact us for advice.
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