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Case Study Flashcards

1
Q

Describe Bury St Edmunds

A

It’s a civil parish in West Suffolk District. Has a population of 35,000. It’s 2 hours north of London. 30 miles east of Cambridge.

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2
Q

What is soft market testing?

A

Marketing excerice where property isn’t formally taken to the market, but the location / property type is floated with occupiers to gage interest.

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3
Q

Describe building

A

Blockwork on lower section, steep profile cladding on upper section. Rear sides are entirely steel-clad

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3
Q

1960’s building - describe common defects

A

Asbestos is typical
Roofing issues
Paint cracking
Single pain windows
Settling and Cracking
Outdated wiring

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4
Q

How are eaves heights calculated?

A

The clear height between the floor and the lowest point on the underside of the roof

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5
Q

What’s industry standard for eaves heights

A

8 metres

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6
Q

What was in the rental agreement with the theatre school?

A

Signed in September 2022 on a 3 year lease agreement. Breaks every 6 months

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7
Q

What was in your terms of engagement

A
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8
Q

What was in your conflict of interest check?

A
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9
Q

What’s a typical industrial site density?

A

Around 40%

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10
Q

What’s other site densities for other uses?

A

Offices: 40%-60%
Retail: 30% - 60% (depends on parking and walkways)
Residential: 20% - 40%

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11
Q

What’s the current planning use?

A

Use Class E

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12
Q

What would the use class change to

A

B2 / B8

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13
Q

What is RICS Professional Standard: Surveying Safely?

A

Sets out good practice principals for management of health and safety for RICS firms and members.

Structure:
1. Personal responsibilities for firms and members
2. Assessing hazards and risks
3. Workplace health and safety
4. Occupational health and hygiene
5. Visiting sites and premises
6. Fire safety
7. Residential property surveying
8. Procurements and management of contractors.

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14
Q

You drafted Heads of Terms. Where did you find an example template?

A

Code for Leasing Business Premises 2023; Under Part 4: Appendix

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15
Q

When negotiating what did you adhere to?

A

Part 2 and 3 of the Professional Standard: Code for Leasing Business Premises 2023

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16
Q

What were the refurbishment works considered under the budget?

A

Under the £100,000 budget decided by the Council.

  • Necessary roof repairs and cleaning of roof lights
  • Essential repairs to cladding and repainting
  • Clearance of vegetation from yard, repair of cracks and clearance of drains
  • Clearance of rubbish from external open storage area
  • Painting of warehouse and office interiors
  • Servicing the roller shutter doors.
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17
Q

What was the yield for the refurbishment option?

A

6.75%

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18
Q

Why was the yield for the refurbishment 6.75%?

A
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19
Q

How much did the Council purchase the property for?

A

£1.62 million

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20
Q

What was the contingency used?

A

Refurbish: 10%
New Build: 12%

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21
Q

What was the build costs for refurbishment?

A

£100,000 = £4.42 per sq. ft.

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22
Q

What were professional fees for refurbishment?

A

8%

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23
Q

What was the finance rate used and why was this decided?

A

7%
Decided with Council

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24
Q

What profit on cost did the refurbishment option create?

A

C. 35% profit on cost

25
Q

What yield was applie for the new build option?

A

6%

26
Q

What was the build rate for the new build option?

A

£70.00

27
Q

What was the contingency for the new build option?

A

12%

28
Q

Why was contingency higher on the new build option?

A

To reflect the slightly lower build cost rate.

29
Q

Why was there a 2% difference between professional fees on refurb and new build?

A

To include further work required, such as architects that would be required more than refurb option

30
Q

What was the profit on cost of the new build option?

A

c. 12%

31
Q

Talk me through the sensitivity analysis you did?

A
32
Q

Comparables!!!

A
33
Q

What was your fee for this consultancy report>

A

£3,500 + VAT

34
Q

What was the level of PI cover required?

A
  1. any loss or damage to the Client’s property, including but not limited to physical assets owned by the Client, is limited to £500,000, unless otherwise specified in the
    Letter/Proposal; and
  2. All other loss or damage arising under or in connection with this Agreement shall not exceed £5 million unless, otherwise specified in the Letter/Proposal.
35
Q

What is the specification standard of an industrial unit?

A

Steel portal frame with insulated profile steel cladding walls and roof
Minimum 8m clear eaves height with 10% roof lights
Minimum 30kN per sq m floor loading
Plastic coated steel profiled cladding with brick/blockwork walls to approximately 2m
Full height loading doors (electrically operated)
3 phase electricity power (415 volts)
5-10% office content and WC facilities
Main services capped off
Approx 40% site covereage

36
Q

How did you undertake the AML check for the council?

A

They would be considered very low risk and no formal AML ID checks are required. We would request that an AML Assessment form is completed including Section C - contact details.

37
Q

What did you require from the council when undertaking the AML check?

A

Required just contact details of the client contact at the council as the council is low risk in terms of AML, therefore no formal AML is required

38
Q

What’s the current yield for industrial in Bury St Edmunds?

A

Past 12 months says 7% which is higher than it’s three year average of 6.8%

39
Q

What were the GDV for both options?

A

Option 2 - c. £2.5 million
Option 3 - c. £6.8 million

40
Q

What was the fixed land cost?

A

£1.62 million

41
Q

What was the market rent for option 2?

A

Just under £170,000

42
Q

What was the market rent for Option 3?

A

£420,000

43
Q

What rent frees were applied?

A

Option 2 - 2 months
Option 3 - 5 months

44
Q

Why were professional fees higher for Option 3?

A

To account for architects costs

45
Q

Doesn’t BCIS include Contractors Preliminaries and OH&P in the build costs. Why did you include these in the appraisal again?

A

BCIS includes prelims but not overheads. Went for lower end of the costs but included my own overheads and prelims anyway

46
Q

What are overheads and prelims?

A

Overheads refer to the indirect costs that are not directly tied to a specific project but are necessary for the overall operation of the construction company. These can include:
- Office supplies, utilities, office rent
- advertising
- depreciation of equipment

Preliminaries, often referred to as “prelims” or “site overheads,” are the costs associated with setting up and running a construction site. These costs are necessary to enable the successful delivery of the project but are not directly attributable to specific construction activities. Preliminaries can include:
- setting up site offices
- Water, electricity, temporary fencing
- safety equipment
- security, cleaning and maintenance

47
Q

What costs come under overheads?

A

Overhead costs in construction can include:

Rent for office space and other facilities
Benefits and salaries of full-time employees
Insurance coverage for both people and equipment
General liability coverage
Transportation costs
Labor hours
Utilities like electricity, gas, and water
Government fees and licenses
Taxes on property, land, or other assets
Depreciation costs
Maintenance costs
Other job costs

48
Q

What costs come under preliminaries?

A

The costs involved in site establishment, including access permits, land take, site accommodations like welfare facilities, etc.
Running costs, including heating, lighting, power, etc.
Costs required to hand over or shut down the contract, including demobilising site offices, health and safety files, etc.

49
Q

What’s the difference between overheads and preliminaries

A

In essence, overheads cover the broader operational costs of the company, while preliminaries are focused on the specific expenses required to prepare and manage a construction site for a particular project.

50
Q

How did you inspect for agency instruction?

A
51
Q

How did you measure the property. What did you include and exclude?

A
52
Q

What is vacant possession

A
53
Q

Does a theatre school come under the planning use?

A
54
Q

Where the 6 month breaks mutual or landlord only?

A
55
Q

Was there a schedule of condition in place?

A

Yes, but only contingent on if the building was being occupied as it was. If the property was being redeveloped the schedule of condition would be voided.

56
Q

Why didn’t you consider a builders merchants?

A
57
Q

What were the eaves heights on this building

A

Min eaves 4.5 metre
Max internal 5.5 metres

58
Q

You said there were site opportunities what were these?

A

General BSE market - performing well
Next to A14

59
Q

You said there were site constraints, what were these?

A

Smaller road to site at the moment
Low site coverage of the current site

Flashcards (24 decks)

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