Adam's Case Study Flashcards
When making statutory enquiries, what were you searching in particular?
I searched for an EPC of the property to confirm it adheres to the MEES regulations. Planning applications and decisions. Radon, Mining, Flooding.
Were they any prior planning applications?
Not since the permission to construct the building in about 2000
Did you check for asbestos?
The use of asbestos was banned in 1999, so the building could not have included the material.
What is the hierarchy of comparable evidence?
Firstly, I’d look at the transaction type: open market, lease renewal, rent review, third party determination, sale and leaseback, inter company. Then categories A, B and C. A being transaction of similar properties, some case where offers have been made and possibly asking prices with careful analysis. B being other published sources and C being different types and locations of property.
Did you incorporate any transactions costs in your valuation?
In my MV1 valuation, the comparable yields were reported as gross initial yields, so I applied a GIY of 6.25% to arrive at my valuation. For MV3 the comparable yields were shown as NIY so I deducted transactions costs after capitalising the rent. (1% agency, 0.5% legal and 4% Stamp Duty)
Why didn’t you value the Property as a residential development?
My initial thoughts were that the property wouldn’t fit in to the local residential market, which was mostly detached and semi-detached houses, as it would only be suited to flats and it adjoined an industrial area. There were no comps for flats, but I did find that the residential values were quite high, more than commercial. I assessed likely conversion costs using BCIS and used comps of nearby house sales to apply a price per sq m. I undertook a development appraisal considering the conversion costs, 20% developers profit and 6% finance costs. BCIS conversion costs varied a lot and there was no obvious configuration to value based on, without a development scheme the valuation required much wider assumptions which would create a greater level of uncertainty.
What were the biggest challenges you faced in the case study?
Other than the issues highlighted in my submission. Collecting comparable evidence of doctors surgery in the same location was difficult, and so was overcoming the lack of the evidence.
How did you advise on sustainability in you case study?
The EPC for the property was a C, meaning it would have no barriers to sales or lettings on the basis of the EPC in the near future.
What level of PII was agreed in the ToE for Barnet Hill Academy?
£500,000, which is standard for my company for valuations of this nature. However, I have since read Risk, Liability and Insurance 2021 which recommends agreeing lower liability caps to protects members and firms.
