A brownfield site is a piece of land carrying a history. The history costs money to remove; the land is what is being bought. The whole of the method consists in separating the two and pricing each.
1. Three competing readings of the same site
Faced with an industrial site that has stopped working, the valuer runs three readings side by side and lets the figures decide between them rather than deciding in advance:
- Industrial reuse — another manufacturer or a logistics operator takes the site as it stands, or after adaptation works. Value then rests on the market for activity premises, generally through depreciated replacement cost or through rental value.
- Subdivision into ordinary activity units — the site is cut into lettable cells occupied by smaller businesses. Value becomes a capitalised income, net of the works needed to divide, service and meter the building.
- Land conversion — demolition and redevelopment under another use altogether: residential, office, mixed, or a public facility, provided the zoning permits it or is likely to. Value is then built through the residual method.
The RICS principle of highest and best use requires the valuer to adopt the most valuable use among those that are legally permissible, physically possible and financially viable. Our general guide to valuing an industrial asset in Morocco sets out that framework; the brownfield site is its limiting case, the one where the land reading usually ends up prevailing over the building reading.
One caution before any arithmetic: the three readings are not equally probable, and the valuer's job is not to pick the flattering one. In an industrial basin that is still active, reuse by another manufacturer frequently beats conversion — particularly where the zoning remains industrial and the building stock is sound. The reflex that treats every closed factory as a development opportunity is a market reflex, not a valuation method.
2. Zoning: the governing variable
2.1 What the planning document permits today
The first check is documentary: what does the current zoning allow — continued industrial use, activity uses, mixed use, housing? A site zoned for industry carries no certain residential value, whatever the urban pressure around it. The valuer reads the applicable rules, the planning information note and the easements affecting the plot, and founds the base value on the uses that are actually authorised. Where that reading needs to be taken further, our note on the planning information note sets out what the document does and does not establish.
2.2 The change-of-use scenario: an expectation, not a certainty
A great many brownfield sites are negotiated on the expectation of a reclassification at the next revision of the planning document. That expectation carries a price in the market — operators build it into their bids — but the valuer must treat it for what it is: a conditional scenario, presented separately from the value under current zoning, with its assumptions written out. Confusing the two is the costliest error in this segment, and it is committed in both directions: by sellers who bank a rezoning that has not happened, and by buyers who ignore an evolution that is already well advanced.
The practical form this takes in the report is simple. One value under current zoning, stated as the conclusion. One or more conditional values under alternative planning assumptions, each labelled as such, each with the conditions that would have to be met and an honest statement of how far they are from being met. The reader is then free to weigh them; what the reader must never have to do is guess which is which.
3. The residual method applied
3.1 The principle
The value of land held for development is what an operator can pay for the ground while still delivering the scheme: the exit value of the programmepermitted by the zoning, less the costs of clearing the site — demolition, asbestos removal where relevant, remediation — less construction and servicing costs, less fees and finance, less the operator's margin. The balance, the residual value, is acutely sensitive to the inputs. The valuer documents them one by one and tests how the answer moves when each is varied. A residual appraisal presented as a single figure with no sensitivity analysis tells the reader far less than it appears to.
3.2 Remediation: a liability to be investigated, not guessed
Surface treatment shops, buried tanks, hydrocarbons, old made ground: the history of use of an industrial site leaves traces. The property valuer is not an environmental consultancy — the valuer documents the history, flags the indications of a liability, recommends the investigations required and incorporates the estimated costs, or a reasoned allowance, into the calculation. A report that passes over the question in silence leaves the buyer exposed and weakens the position of anyone lending against the site. The absence of a soil study is not the absence of a liability, and the report should say which investigations remain outstanding rather than imply that none are needed.
3.3 The market cross-check
Where transactions in comparable land exist — converted industrial holdings, plots on activity estates — they serve as a check on the residual appraisal rather than as a substitute for it. Any gap between the two readings is explained item by item: development capacity, clearance costs, programme, administrative risk. The mechanics of the residual approach itself are set out in detail in our note on the residual method under VPGA 10.
The residual value is a balance, not a headline
Everything that has to be spent to make the scheme possible comes out before the land is paid for. Demolition, stripping out, remediation, the years of carry and the risk of the consenting process are all deductions. A brownfield site quoted at the value of the finished scheme is not a valuation; it is an opening position.
4. What the instruction needs
- Land tenure and planning — the land title, the zoning and applicable rules, the planning information note, easements, the position of the site within the urban fabric, access and services.
- History of the site — the successive activities carried on, any classified installations, tanks and storage, known incidents, and the dates that go with them.
- Existing buildings — structural condition, whether sound halls can be retained and reused, the cost of demolition and of stripping out.
- Environment — soil studies available, indications of contamination, reinstatement obligations attaching to the site or to its former operator.
- Market — land and property references for the sector, and the appetite of operators for the kind of scheme the zoning actually permits.
The quality of a brownfield valuation is largely decided by the quality of this file. Where a piece is missing, it is named as missing and its absence is carried as an assumption — never quietly filled in with a plausible figure. A brownfield instruction is also where the boundary of the scope must be stated in writing: a property valuation covers land and buildings, not the residual production equipment, which falls under a separate plant and machinery valuation.
5. Common errors
- Valuing a rezoning that has not been granted — value under a future zoning is a conditional scenario, to be presented separately with its assumptions.
- Forgetting the cost of clearing the site — demolition, stripping out, remediation: the residual value is a net balance, not the value of the scheme.
- Neglecting the programme — a redevelopment runs in years; the cost of holding the land and the administrative risk both weigh on what an operator can pay today.
- Ignoring the industrial reuse value — in active basins, reuse as activity premises can beat conversion, especially where the zoning stays industrial.
- Treating contamination by silence — no study does not mean no liability; the report must state what remains to be investigated.
- Mistaking the site for the business — the company that operated it carries contracts, stock, staff commitments and debt; the property asset is land, buildings and the rights attaching to them. The report states which of the two it establishes.
6. What the report is for
Selling a site that has stopped working, arbitrating between industrial reuse and redevelopment, negotiating with a developer, funding a conversion scheme, reporting under IFRS or Moroccan standards, restructuring a family holding: in each case the report ranks the scenarios, prices each one with its assumptions on the face of it, and sets out a reasoned value. Its conclusions are built to be argued with — named assumptions, cited sources, a stated methodology — so that they are documented and verifiable line by linerather than defensible only as a block. This is a private valuation: it informs a decision and an arm's-length negotiation. Our reports are prepared by RICS-certified experts and comply with Red Book standards.
A brownfield instruction is quoted case by case according to the size of the site, the number of scenarios and the purpose. For reference, our valuations start at 3,500 MAD excl. tax for standard assets, with a firm quote within 24 hours and delivery in 5 to 8 days, or 48 to 72 hours on the express service. ReaConsult has been advising owners, developers, investors and funding institutions since 2019, with more than 5,000 valuations completed, offices in 6 cities and a rating of 4.9/5 across 47 reviews.
Holding, selling or funding a brownfield industrial site? Have the scenarios ranked and each one priced, with the environmental liability carried in the calculation rather than in a caveat.
Request a valuation →Related articles
Note:this article sets out a valuation methodology compliant with RICS standards (Red Book). Planning rules and environmental obligations are governed by the regulations in force — confirm your own position with the competent authorities and your advisers. Costing remediation precisely is the province of an environmental consultancy, not of the property valuer. A private valuation informs a decision and an arm's-length negotiation. To instruct us, see our contact page or the property blog.