Case Study

Question 1

what is AVD

Answer 1

Antecedent valuation date is the day we take non-physical factors of value, economy and law.

Question 2

which comps were the agents? Did he provide any others?

Answer 2

6, 7
The agent provided three others but I advised the agent there were not part of my basket consideration due to very short leases, not being comparable.

We never had record of one of his pieces of rental evidence, when I asked agent for lease I queried his analysis as the demise plan was missing from the lease he presented. The lease was also a turnover rent. He then conveniently agreed this comp supported £800.

Question 3

Thoughts on agents comps

Answer 3

Comp 6:
£30,000pa on a 5-year lease with effect from 15-Jul-2013
Turnover lease
Rent is determined by 8% of turnover or base rent of £30,000 whichever is greater.
Shell rent

Comp 7:
Property is not comparable and too far from AVD to be considered useful.
Coffee kiosk located in different part of shopping centre hench lower value applied.

Question 4

what is a turnover lease?

Answer 4

A turnover lease is a lease where the tenant’s rent is either partly or entirely determined by the actual turnover generated by the tenant’s business operating out of the premises.

Question 5

What were the two assessments described as in the valuation?

Answer 5

Food Court and premises – in line with comparables

Store and premises – in line with comparables

Question 6

What did I adjust for comp 4

Answer 6

IRI lease so I adjusted for external repairs 5% downwards adjustment

Question 7

was there a service charge? If yes why did you adjust for external repairs is this double counting?

Answer 7

Yes there was

Service charge was for food court seating area cleaning and maintenance, on site security etc.

Question 8

Why didn’t you zone the subject.

Answer 8

Assessment was previously valued on overall basis, as was the comparables
In modern shopping centres where shop depths are similar a reasonable approach is to value on an overall basis (P Bond).

Question 9

what basis did you measure the storeroom to?

Answer 9

Gross internal area – storage space is to GIA.

Question 10

tell me about the construction (case study)

Answer 10

The centre has a steel framed construction with cladding exterior and flat roof and brick/block to the interior of the steel framework. The centre benefits from atria with glass windows in the ceilings which allows natural light within the centre.

The subject property has been fitted out with standard Subway fixtures and fittings, spotlight LED lights, suspended ceiling, floor tiles and timber interior walls with a non-structural brick partition

Question 11

why didn’t we re-merge and then split it?

Answer 11

That would be more time consuming for the same solution

Question 12

are some units in better position?

Answer 12

Yes perhaps some are better located to be seen as customers flow around the centre. However, the idea of the food court is that people enter and consider the array of options available before making a decision. So this will mitigate some of the effects of increased visibility.

Question 13

why haven’t you valued the better position units higher?

Answer 13

Tone based on rental evidence. All units are within the food court which get a equal pull of customers. Food court is designed for people to consider all options first.

Question 14

Did you look for evidence outside the food court?

Answer 14

Yes but I did not located any comparable evidence that would be useful to supplement what I already had.

Question 15

why do you think comp 1 analysed so high?

Answer 15

Lease renewal so perhaps the tenant was prepared to pay more to stay.
Company also occupy comparable 3

Question 16

why did you include comparable 2 if the ED was in 2017?

Answer 16

Even though it was 2 years after AVD it is useful to assess trend of values in food court.

Question 17

why do you think comp 3 analysed so high?

Answer 17

Lease renewal so perhaps the tenant was prepared to pay more to stay.
Company also occupy comparable 1

Question 18

why do you think comp 5 analysed so low?

Answer 18

Difficult to say without seeing lease. I am aware of a break clause after 1 year.
I would say low rent was applied in order to get tenant into property.

Question 19

what use class is the case study property

Answer 19

Class E (b) - commercial, service and business

Question 20

Why was the rental data so spread?

Answer 20

Combination of some tenants agreeing higher rents due to long term tenants waiting to renew their lease, and comp 5 where low rent agreed to draw tenant in.

Question 21

I noticed from internal images of the subject property which is in appendix B of your case study that the subject benefits from CCTV cameras. Why were these not included in the valuation as rateable plant and machinery?

Answer 21

There were only 3 cameras.

We only rate professionally installed cameras where there are at least 6 camera.

Question 22

What do you mean by tone?

Answer 22

General range of comparable evidence setting the price per square metre for similar properties in the locality.

Question 23

What was the valuation of the subject before the check

Answer 23

£50,500

Question 24

Did you issue transition certificate?

Answer 24

Yes I issued reg 18 transitional certificate was issued to update 2010 RL for both the retail servery unit and the storeroom – to certify values at the last day of the 2010 list – replicating what we did in the 2017 list.
This was also done for subsequent assessments within the food court under the same circumstances (if pressed).

Question 25

Are any of the new lettings shell rents?

Answer 25

Only Comp 6 – agents one

Question 26

In the case study did you have regard to the RICS guidance note Surveying Safely and if so in what way?

Answer 26

Guidance note came into effect in Feb 2019.

The RICS have introduced the ‘safe person’ concept. This is when ‘each individual assumes individual responsibility for their own, their colleagues’ and others’ health and safety while at work’.

As the inspection was during the covid-19 pandemic, I undertook safe system of work by wearing a mask and social distancing and enforcing this where required.

There is also a greater emphasis on ensuring the competence of individuals, including their responsibility to ensure the use of safe work equipment and safe systems of work for themselves and others.

Furthermore, RICS Regulated Firms must ensure they provide a safe working environment, safe work equipment, safe systems of work and competent staff.

The Surveying Safely document contains guidance on:

• Personal responsibilities for RICS members and corporate responsibilities for RICS-regulated firms.
• Assessing risks and hazards.
• RICS members’ place of work.
• Visiting premises or sites.
• Fire Safety
• general procurement and management of contractors.

Question 27

What case law do the four tenets of rateable occupation come from?

Answer 27

John Laing v Kingswood AC 1949