Golf clubs and land options

by Ian Barnett, National Land Director, Leaders Romans Group (LRG)

Golf clubs across the country are making strategic decisions about land use to ensure a profitable future.

Leaders Romans Group is advising on many of these decisions in relation to land use, planning and business rates. Such decisions do not mean encouraging golf clubs to sell up and close, but to explore alternative options that enable them to capitalise on high land values and take advantage of planning policies to benefit the future viability of the club and in some cases their local communities too.

A significant number of golf clubs are located in areas which were once rural or suburban but are now central to towns and cities.

Given their less detrimental impact on the landscape, golf clubs (compared to housing) are arguably better suited than most types of development to relocate to greenfield sites which are less expensive and in many respects more attractive.

As a land agent, I’ve been pleased to enable golf clubs to benefit from these circumstances.

Blue Mountain Golf Club in Bracknell Forest is a good example this approach. The golf club was surrounded by residential development and had potential to accommodate significant additional development including a new school, as well as new golf facility. In 2014, LRG and its planning consultancy Boyer began work with the owners on maximising the use of the site. It now benefits from a new ‘Golfplex’ entertainment centre, driving range, club house and car park. The new facilities have proven to be popular and the new school with associated sports facilities provide a fantastic new addition for the local community. The site also provided 400 new homes – not only raising considerable capital but also helping to address the local housing need.

For those thinking of benefitting from situations such as this, the starting point is an analysis of local land use and opportunities, which includes the demand for land, the local market value and property prices, the local planning authority (or Mayoral) development plan and growth targets and proposed changes such as new schools and transport infrastructure.

It’s also important to look at the accessibility of the current site, any restrictions to development (such as Green Belt or conservation area status), its proximity to local services and amenities and any physical restrictions or benefits. This will help determine both the value of the club’s current location and its potential for relocation elsewhere.

Ian Barnett

There are many different land transaction types. These can broadly be summarised as: unconditional sale, sale subject to planning consent, sale with planning consent and option and promotion agreements. In each case, the approach taken must reflect the owner’s objectives, specifically regarding time and risk, and the chosen method of sale will significantly impact the price achieved.

So, for example, an unconditional sale is typically best suited to a distressed landowner in a hurry to sell or whereby the value is already crystallised (i.e it is allocated in a Local Plan). But land sold as a golf course without planning permission for residential development will typically result in a lower price. This is because the buyer would need to invest significantly in gaining planning consent, and without any guarantee of success.

Another, option is a ‘conditional contract’ or ‘option agreement’ which enables the owner to pursue planning consent with an eventual sale agreed if planning consent is achieved – but the buyer has the option to withdraw from the transaction if the planning application is unsuccessful. On this basis, the buyer will be prepared to offer more as their financial risk is lower as compared to an unconditional sale. Despite this, this is not a quick route to a land sale: it can take months, even years, for planning permission to be granted and so financial return is delayed. On the plus side, if a golf club can dispose of land with the benefit of planning permission (or an allocation), it will achieve a higher land value.

There is one further form of land sale: promotion agreements. These are increasingly popular and are well suited to large sites such as golf courses. Under these agreements, the developer/promoter uses their own funds, experience and expertise to seek planning consent. When planning permission is secured, the landowner will then sell the land with the promoter taking an agreed share of the sale price. In essence this creates a partnership model whereby both parties have a mutually beneficial objective – to maximise land value.

LRG has a track record of advising on golf club sites. In 2012 we were instructed as advisers on the sale and relocation of Basingstoke Golf Club. LRG and Boyer secured an allocation for up to 1,000 new homes, and oversaw the sale of the land to Bloor Homes and for the golf club to relocate to a new, more suitable site with state-of-the-art facilities, a driving range and the latest course equipment. The Club has successfully re-located and the original site is currently under construction.

The planning world is complicated and ever-changing. Other opportunities that might be relevant include the relatively recent permitted development rights which allow change of use from one Planning Use Class to another (in certain circumstances). On the other hand, the introduction of new ‘planning gain’ requirements can create additional challenges – one of which is the requirement that any new development achieves a minimum 10% uplift on the existing biodiversity on site.

Another important consideration for golf clubs is business rates. LRG, through its rating specialists Dunlop Heywood, has represented over 170 golf courses across the UK.

This work involves analysing the trade at the club, utilising relevant indexation where required, establishing the Fair Maintainable Trade at the valuation date, calculating and comparing different valuation methodologies, considering the premises in relation to comparable golf clubs and negotiating the appropriate rate to apply.

In analysing and appealing clubs’ 2017 and 2023 Rating List assessments we have generated savings of approximately £1.72m.

Navigating the planning system against the backdrop of seemingly persistent economic uncertainty presents a real challenge for landowners.  There are solutions out there: land diversification, whether developing, relocating, or seeking alternative uses can increase a club’s value and generate income. Substantial changes may be necessary, but with the appropriate strategy, substantial change can result in substantially increased profitability.