The €25 million site that was worth between 6 and 10

An industrial site in Madrid reached us with an attractive thesis: a new regional law would allow temporary accommodation on vacant industrial land while keeping all of its industrial buildability. On that reading, the asking price of 23 to 25 million euros made sense.

We could have sent that thesis to ten funds. First, we went to the municipal file of the special plan that applies the law. In a 194-page annex, the town hall has a sheet for every industrial area in the city. The one for this site said global industrial use and added a literal remark:

"Signs of possible covert residential conversion are noted."

With the uses that are permitted (urban logistics, retail, hotel) the residual value of the land was between 6 and 10 million. The asking price matched the value of a use that does not exist on that plot.

We told the owners, with the sources, without a curt "no" and without asking for anything in the same message. Losing that deal was the best way to show what we are for. Our rule ever since: before valuing land, read the area's planning sheet.

A real case, told without names or exact locations to protect owners, buyers and partners. Guide: what a land broker does and how to choose one.