Level Three - Example Two (Tottenham)

Question 1

Did you include costs to split the space?

Answer 1

Primary approach was not this as demand would likely be from the current occupier. However, if it was, I would have established the cost and applied.

Question 2

Were they let on ASTs? How might this impact your valuation?

Answer 2

Yes. No right to renew for the tenant - landlord can take back control of the space. E.g. for development etc

Question 3

Did you include a SWOT analysis? Why are these important?

Answer 3

Strengths:
- Freehold
- Fully let and income producing
- Situated on a major road with high visibility and footfall
- Good bus links.
Weaknesses:
- Communal Areas require refurbishment.
Opportunities:
- Sell the property as an income producing asset.
- Large site, with future development potential.
- Some of the residential units are ‘over-sized’ and could be subdivided.
Threats:
- Tenant failure of the retail occupier.

Question 4

What capitalisation rate did you apply?

Answer 4

Retail element – 6.75%
Residential element – 5.75%

Question 5

What Market rent did you put on the supermarket?

Answer 5

It was rack-rented at £130,200 equating to £18.00 psf

Question 6

What do you mean pay a premium for a smaller portion of the unit?

Answer 6

A national retailer would pay a higher rate per square foot for a smaller unit

Question 7

Did you back this up with comparable evidence (higher rate for smaller part of unit)?

Answer 7

Yes

Question 8

What was the specification of the building?

Question 9

What basis of measurement did you use?

Answer 9

GIA - comparables, market practice