A land assembly is when two or more properties with abutting
property lines sell together to create a larger, more desirable land mass.
This is attractive for developers because the larger the
land mass, the more density can typically be done. Additionally, you have more
opportunity for redeveloping into higher densities such as town homes or
condominium apartments.
Let's assume that the market value of your home is $650,000. You start talking to the neighbour to the west (on the right) and mention you are thinking about selling. That neighbour says "Hey! Me too!"
Your lot dimensions are: 30x125 and your neighbours lot is also 30x125 and the condition of his/her house is comparable and the value is the same; also $650,000. With both of your lots together; you now have a combined lot size of 60x125 (as shown outlined in yellow).
You look across the street and see the town home development that was built 10 years ago. That development has a frontage of 125x125. They have 7 town homes on the front and 7 behind with a condominium road in the middle.
You call your REALTOR to ask what developers are paying for town home development sites in the immediate area. Your REALTOR says; Developer XYZ Inc. just paid $275,000 per town home lot. However, that was based on it being approved.
Based on the comparable directly across the street, which has 14 Town houses, you consider the fact your combined lot has 5' less frontage and can reasonably expect to get 6 in the front and 6 town houses behind with a common element road for a total of 12. At $250,000 per lot has a total potential value of $3,000,000. Divide that among 4 lots; each lot is worth a potential $750,000. A difference of $100,000.
So you approach your neighbours on either side to create a similar lot size as the town home site across the road; 120x125 (as shown outlined in green):
I am not suggesting all properties will have more value as an assembly. It is entirely based on what can be developed. This blog post is strictly to explain the potential an assembly can have for the home owners. A substantial number of "Infill" developments are acquired, developed and built just like this.