What is the Meaning of Highest and Best Use

Highest and best use (HBU) is a concept in real estate that refers to the best use of added value for a property, regardless of actual and current use but is physically possible and financially feasible.

Julizar Consultants are well trained and experienced in conducting highest and best use studies focusing on four main factors: legal clearance, physical possibilities, financial viability and maximum productive use.

We understand that the value of a property and its use are closely related so that its highest and best use is the one that yields the highest current value and yields the greatest net return over a given period or for the foreseeable future. We also consider the impact of the surrounding environment, competitive forces and local politics, and the timing of potential property developments.

A large number of our clients, especially real estate developers and state-owned enterprises who have unused buildings and thus do not benefit from the land.

We can help you create the highest and best utilization studies. The results of our research can help you answer your doubts before starting construction.

We offer the highest and best use studies for various office, retail, industrial and land properties across Indonesia. Highest and best usage analysis can be completed in a stand-alone job.

Highest and Best Use Study

The highest and best use of a property refers to the possible use of vacant land or an improved property that is physically feasible, appropriately supported, and financially feasible and that yields the highest value.

A highest and best use study seeks to identify which use will give the maximum value to a vacant plot of land or an improved plot of land.

The highest and best use analysis for a particular property must meet certain criteria flowing sequentially. The commands are generally:

• Legally allowed
• Physically possible
• Financially viable
• Maximum productive

A legally enforceable and possibly physically enforceable sequence of sequences is enforceable in any order. However, potential uses must meet both of these requirements before moving on to financially viable or maximally productive analysis.

This means that uses that are not legally permitted by zoning or other restrictions, or that are physically impossible due to location or building limitations will not be considered for financial viability.