Case Study Flashcards
What is the difference between a Market Appraisal and Red Book Valuation?
A Market appraisal is an informal estimate of a property’s Value, often used for sales or lettings.
A Red Book Valuation is a formal, RICS compliant valuation conducted by a Registered Valuer.
What are the key considerations for terms of engagement for this type of instruction?
Ensuring that I am sufficiently competent to act
Who the owner is?
Type of Agency Agreement
Fees
AML
Marketing costs
Legislation
Rights
Signatures
What are the key principles in “Surveying Safely” for undertaking inspections?
Carrying out a pre-assessment of the hazards and risks that are likely to be encountered, including appropriate PPE.
Travelling to and from site.
Risk Assessments
Competence
Communication
PPE
Access
Lone Working
Emergency planning
Detail the licence requirements for using OS data in plans?
Business Use OS Data Licence
Legal compliance to prevent legal action
What are the latest standards for measuring practice?
The latest Standards are IPMS All Buildings.
Since then, the RICS is updating the Code of Measuring Practice 6th Edition and RICS Property Measurement 2nd Edition.
During this period, members should adopt the appropriate measurement basis to satisfy the requirements of the instruction.
What are the key principles of “Comparable Evidence in Real Estate Valuations”.
Comprehensive
Similar
Recent
Arms length transaction
Verifiable
Consistent with local market practice
The result of underlying demand
Talk us through the statutory requirements of letting commercial property?
Ensure that the property has an EPC.
Gas and electricity safety certificates
Fire Safety
Asbestos Management Plan in place.
Business rates
AML
What are the key principles of the “Code of Leasing Business Premises”.
The Code of leasing Business Premises sets out key principles to ensure fairness, transparency and efficiency.
Negotiating heads of terms
Lease negotiation best practices
Model heads of terms
Guide for landlord and tenants
What are the current statutory requirements with regards EPC ratings for commercial premises?
Minimum EPC rating of E
What are the thresholds under the Land Registration Act for registering leases.
All leases 7 years or longer should be registered.
Please can you detail the findings of our desktop due diligence?
Planning history of the site
Site location, satellite view of access.
Flood risk assessments
Request and review plans and any surveys previously carried out.
Review the Title.
Compliance with Building Regs
Look at local data
Infrastructure
Talk through your inspection of the Property?
After arranging access with the client, I carried out a dynamic risk assessment of the site on entering the site, systematically walked the site and took check measurements, asking our client questions such as where the services were etc, made note of the surrounding occupiers and properties, took photos, noted condition and measured the access.
What adjustments did you make using a dynamic risk assessment, whilst inspecting the Property?
So bearing in mind the principle of a dynamic risk assessment, if i noticed any potential dangers during the inspection i would take precautions to avoid these areas.
I adjusted the inspection in real time based on the information i collected when inspecting ensured safety.
What was the sum of your measurements?
I measure the net useable area.
Detail what indications of contaminants you were looking for whilst inspecting?
Staining and discolouring, evidence of fuel spills.
Odours, usual smells
Vegetation Stress
Surface deposits, unusual residues
Sheens on standing water
Previous use indicators such as tanks.
Talk through your sensitivity analysis calculations for Commercial development?
The key two were build costs and yield sensitivity analysis.
What yield did we need to achieve to ensure viability.
Did reducing the build costs make it viable.
I changed the variable in increments of 5% to assess different scenarios.
How did you make sure your source of development costs were robust, to support your analysis?
We have very good internal data and local knowledge, but this was cross checked with BCIS (Build Cost Information Services), an online cost price index that is regularly updated.
Set out your analysis of open storage evidence?
I focused on direct comparable evidence, ideally in Cromer or similar location.
When did the transaction take place.
What is a new lease or rent review/lease renewal.
Size
What was agreed, common unit of comparison £per acres.
Lease terms
Condition of the site.
Talk though your analysis of market availability for open storage?
A review of commercial agency portfolios in the area
Online data bases such as Rightmove
Loopnet
local knowledge
EG radius/co start.
What was your conclusion as to the cost-benefit-risk of the 3 options in comparison.
Development was too risk for the level of capital expenditure required.
I suggested that when planning permits in the future, to revisit.
Talk through your analysis of comparable evidence?
Utilised our internal data, and online portals such as E.G Radius.
I focused on direct comparable evidence, ideally in Cromer or similar location.
When did the transaction take place.
What is a new lease or rent review/lease renewal.
Size
What was agreed, common unit of comparison £per acres.
Lease terms
Condition of the site.
What was your conclusion as to Market Rent for the Property?
£25,000 per annum.
Detail your conclusions from sensitivity analysis as to letting as whole, or sub-lots.
I looked at optimum number of lots, and how an increase in lots would impact the overall rate of return.
What was the cost-benefit-risk of letting as whole vs as lots?
Letting as whole would be cheaper, no separation costs, legal costs and less management costs.
