Investing in Unzoned Land: Risk or Opportunity?

What Is Unzoned Land?

Unzoned land is property that is not in a status open to construction in an approved zoning plan, and therefore no structure can be built on it. Agriculturally classified land can also be evaluated in this context.

Why Does Unzoned Land Attract Interest?

Unzoned land attracts investor attention due to the potential value increase that will arise when it gains zoning:

• Plan Change: In zoning plan revisions at the municipal or provincial level, parcels appearing as agricultural land may be opened for residential, commercial or industrial zoning. This process can multiply the value of the land several times.
• Major Project Effect: The planning of infrastructure projects in the surrounding area increases demand for unzoned land in the nearby region.

Risks of Unzoned Land Investment

• Long-Term Waiting Period: Plan changes can take years, even decades. The illiquid nature of the investment requires patience.
• Expropriation Risk: Major infrastructure projects may sometimes expropriate parcels registered as agricultural land. The expropriation price may remain below market value.
• Plan Change Uncertainty: It is not possible to give assurances about whether and when plans will change.

Tips for Successful Unzoned Land Investment

1. Regularly follow the zoning plan change agenda.
2. Position yourself at the periphery of major projects at an early stage.
3. Limit speculative investment to a certain proportion of your total portfolio.
4. Evaluate the probability and compensation amount of expropriation in advance.
5. Plan the investment period as at least 5 to 10 years.

Kupon Araziler's Approach

Unzoned land is included in our portfolio; however, we require a strong rationale for each listing: a plan change expectation, a neighbouring project, the quality of productive agricultural land or a similar concrete catalyst. We do not include speculative land without justification in our portfolio.