At a glance:
- STCA properties offer future development potential, giving investors the flexibility to redevelop, reposition, or enhance the value of their assets.
- Strategic redevelopment can significantly boost capital growth, allowing underutilised sites to be transformed into high-performing assets like multi-storey buildings or mixed-use developments.
- These properties attract future-focused buyers and developers, increasing resale value, especially in areas with limited zoned, developable land.
- Investing early in STCA-qualified sites enables long-term equity growth, particularly in areas targeted for rezoning, infrastructure upgrades, or population expansion.
While investing in a property, we often focus on returns from rental income, future sales, or capital growth. However, we often overlook the potential return from redesigning or redeveloping the property itself. If you fail to consider the possibilities for future development, you could be missing out on significant long-term value.
That’s why, more and more investors are now targeting properties with future development potential, often labelled as STCA (Subject to Council Approval). These types of properties are attractive because they offer room for growth. A site that’s currently underutilised might have the right zoning and overlays to support a future apartment complex, retail expansion, or mixed-use development.
In this blog, we will help you understand the value of investing in properties with future development options.
What Does STCA Mean and Why Does It Matter?
STCA (Subject to Council Approval) is a term used in real estate to indicate that a property has potential for development or redevelopment, subject to approval by the local council. In Australia, any proposed changes to land use, building design, or property layout must go through the council’s planning approval process.
Common types of development that may require council approval include subdividing a residential property, adding additional levels to an existing building, or converting the space for a different use.
Understanding council planning frameworks, zoning rules, and overlay controls is essential to identifying viable opportunities. When done well, it allows buyers to capitalise on future land use changes and unlock greater value.
Benefits of Investing in Properties With Development Potential
Investing in a property with future development options opens the door to generating greater returns from the same investment over time. It also gives you flexibility to adapt the property to evolving needs or market trends as opportunities arise.
Properties with development potential can further improve your exit strategy. A site with approved or potential development pathways is often more attractive to future buyers and developers, giving you more options when it’s time to sell.
Let’s explore the key benefits of investing in STCA-qualified properties in detail.
Potential Capital Growth Through Strategic Redevelopment
When future development is permitted, the value of the land or property often increases significantly, particularly in growing metropolitan areas like Melbourne. Properties with future development options give owners the ability to add additional storeys, subdivide, or repurpose the site for retail or residential use. This potential to enhance the asset over time indicates that the land’s future value often exceeds its current use.
Here is an example to illustrate this. Consider a commercial property, say a single-level retail site in Melbourne that currently operates as a convenience store. However, if the land is zoned for Commercial 1 use and the owner successfully obtains council approval (STCA), they could redevelop the site into a four-storey mixed-use building with retail on the ground floor and apartments above.
When councils approve such upgrades, the land value typically increases substantially. Development potential can create significant capital gains for investors.
Read More: What Commercial Real Estate Investors Need to Know About Property Zoning in Melbourne
Flexibility for Future Changes in Property Use
You may be satisfied with your property’s current use, but market conditions and business needs can evolve over time. Investing in a property with development potential ensures you’re not locked into one fixed use.
For example, consider a small industrial property in a city-fringe location. While it may currently be leased for warehousing, STCA could allow for future conversion into creative office suites or a hospitality venue. As the surrounding neighbourhood gentrifies, the ability to adapt the site’s use helps keep the property competitive and income-generating.
STCA-qualified sites provide long-term flexibility and adaptability. Investors can reposition a property over time to align with shifting market demand.
Read More: Commercial Real Estate Future Outlook 2025
Enhanced Resale Value
SCTA allows for the potential redevelopment or redesign of an asset. But even if you don’t plan to undertake the project yourself, that’s perfectly fine. Not every investor has the intention or the capital to manage a full-scale development. However, this doesn’t mean a property with STCA potential can’t deliver a strong return. In fact, one of the most strategic approaches is to buy, hold, and sell to a developer at the right time.
A property with future development options can be far more attractive to future buyers. Developers are often actively seeking sites they can transform to meet urban growth needs. STCA-qualified properties appeal strongly to these buyers, particularly developers and visionary investors with the resources, networks, and experience to execute ambitious projects.
Moreover, developers frequently face a bottleneck: while they may have the plans and funding in place, appropriately zoned or developable land in their preferred area is often scarce. This scarcity increases competition and can drive up the value of STCA sites, especially if the planning overlays, height allowances, and usage flexibility tick the right boxes.
Long-Term Growth and Equity Opportunities
One of the most underrated benefits of purchasing an STCA-qualified site is the ability to generate substantial equity growth over time, particularly when urban expansion, rezoning, and infrastructure investment align in your favour.
While a property’s current value may reflect its existing function, its long-term value is increasingly tied to its future potential and how soon the surrounding area will support that evolution. As Melbourne’s population grows and urban expansion continues, councils are under pressure to increase housing density and enhance key amenities in some locations.
Investors who move early, before the area reaches peak demand, can ride this wave of growth and equity uplift.
How to Identify High-Value STCA Opportunities
Now that we’ve explored the value of properties with future development potential, let’s look at how to identify the highest-value STCA opportunities.
- Partner with experienced commercial real estate agents who understand local planning schemes and can identify properties with strong redevelopment potential.
- Target underutilised or low-density properties in areas designated for urban growth.
- Review council planning maps and overlays to understand zoning rules, height allowances, and usage potential.
- Monitor areas flagged for rezoning or infrastructure investment that could unlock future value.
- Conduct feasibility assessments early to ensure the site can realistically support your development goals.
The key is that investing in properties with STCA potential gives you options. Whether you choose to redevelop, reposition the asset or enhance its resale appeal over time, these sites offer flexibility that standard properties often can’t match. It’s a long-term play, but when backed by the right strategy and advice, it can deliver substantial rewards.
Thinking about your next investment move? Contact us at Axis Property, and we will help you identify the best commercial properties with future development potential.