Should You Sell With Your Neighbour? How Site Amalgamation Works

Why Two Blocks Together Are Worth More Than Two Blocks Apart

In property development, bigger sites are more efficient. A developer building 6 townhouses on a 1,200m² amalgamated site achieves better margins than building 3 townhouses on each of two separate 600m² blocks. This efficiency translates into a premium they will pay you.

The amalgamation premium is typically 10-25% above the sum of individual property values.

How the Premium Works

Example: Two Adjacent Blocks in Stafford

The developer can build 6 townhouses instead of 3+3, with shared driveway and infrastructure, better building layout, and reduced per-unit costs.

When Amalgamation Makes Sense

Good Candidates

• Adjacent blocks on the same street, both over 500m²
• Combined site would cross a development threshold (e.g., enough for 4+ townhouses)
• Both owners are willing to sell within a similar timeframe
• Blocks are zoned Low-Medium Density or higher

Not Ideal

• One owner is not willing to sell
• Blocks are separated by a laneway or third property
• Combined site does not significantly increase development potential
• One block has major constraints (heritage, severe flooding)

How to Approach Your Neighbour

This is the most delicate part. Here is a respectful approach:

1. Casual conversation first — mention that you have been thinking about your property's future and ask if they have too
2. Share general information — mention that combined sites can attract higher offers
3. Suggest a joint appraisal — offer to share the cost of a professional assessment
4. Engage an independent agent — having a third party manage the process removes personal tension

What not to do:

• Do not pressure your neighbour
• Do not share specific financial details about your property
• Do not approach developers before your neighbour is on board
• Do not sign anything with a developer before getting independent legal advice

The Process

Step 1: Align on Intentions

Both parties agree to explore a combined sale. No legal commitment at this stage.

Step 2: Joint Appraisal

Engage a development-focused agent (like ACRES) to appraise both properties individually and as a combined site. This reveals the amalgamation premium.

Step 3: Agree on Price Split

The most common approaches:

• Equal split — total price divided by 2 (simple but may not be fair if blocks differ)
• Proportional to individual values — each party receives their individual value plus a share of the premium proportional to their contribution
• Per square metre — total price divided by total area, then allocated by each block's area

Step 4: Joint Marketing

The agent markets the combined site to developers through a structured sale process. Both parties are represented by the same agent (with separate legal advisors).

Step 5: Contract and Settlement

A single contract covers both properties with defined settlement terms for each party. Each owner's solicitor protects their individual interests.

Legal Considerations

• Separate legal representation — each party must have their own solicitor
• Joint listing agreement — defines how the agent acts for both parties
• Price allocation — must be agreed in writing before accepting any offer
• Settlement alignment — both settlements should occur simultaneously to prevent one party being disadvantaged
• Confidentiality — agree not to discuss financial details with the developer separately

The ACRES Approach

We regularly facilitate amalgamated site sales across Brisbane. Our process:

1. Independent appraisal of each property
2. Combined site feasibility assessment
3. Transparent price allocation recommendation
4. Structured EOI campaign targeting qualified developers
5. Joint negotiation with clear communication to both parties

Contact us if you and your neighbour are considering a combined sale. Initial consultations are confidential and obligation-free.

Daniel McCormack

Managing Director, ACRES — Australian Commercial & Residential Group

07 3096 0542About the author →Meet the team →