The redevelopment and value of contaminated land.

This study examines the effects of contamination on the redevelopment and valuation of industrial land. The period covered by the study was one in which environmental legislation in the United Kingdom was undergoing significant changes. The Government's proposal to introduce registers of 'potentially contaminated sites' was fiercely opposed by different interest groups and was abandoned. New legislative proposals followed but will not take effect before 1997. During the same period, the guidance given to the valuers of industrial properties, and of other properties which may be affected by contamination, has been limited in scope and difficult to implement.It is argued that contaminated land is an important resource and that a 'risk assessment' approach should be adopted for valuation purposes and the appraisal of redevelopment proposals. The processes involved in the investigation of contaminated sites, the selection of treatment methods and the role of the valuer in these actions are considered. Alternative approaches to the valuation and appraisal of contaminated sites are described, both in situations where the existing industrial use is to continue and where redevelopment is proposed. Value was found to be affected both by the cost to treat the contamination and perceived 'risk factors', which are collectively termed 'stigma'.Besides valuers, many different actors are involved in the property development process. These actors are likely to hold differing views in respect of treatment methods, the value and desirability of redeveloping contaminated sites, according to the nature of their involvement. Questionnaire surveys were undertaken of valuers and other professionals involved in redevelopment, in order to test their perceptions of the risks involved. The views of a 'general population' sample were also obtained in respect of a number of environmental issues, in order to compare the views of two 'expert' groups with those of a wider population. Interviews were conducted with a number of leading valuers, so as to assess current practice in reflecting the possibility of contamination in valuations. The surveys enabled professional perceptions of the stigma effect to be determined. Case studies involving the redevelopment of contaminated sites were researched and the impact of stigma upon transaction prices was assessed.The findings of the research enabled a predictive model to be developed for use in the valuation of contaminated land and this was tested by reference to ten case studies. The perception of risk, associated with contaminated land, held by valuers was clearly identified to be higher than that perceived by the other group of'experts' involved in the development process. All of the professionals were generally supportive of current Government proposals but with some reservations. Property investors were identified as being the most cautious of all actors involved in property development. Further research proposals are described.