MV evidence

Question 1

What was your best evidence?

Answer 1

797 Fulham Road
- Comparable passing rent - reflects £88 ZA
- Comparable unexpired term - 2 years
- Very marginally inferior covenant
- Analysed equivalent yield using target function - based on MR at passing and 6m void
- equivalent showed 5.63%, made a marginal deduction on this 5.50%

Question 2

Why only a 0.1% deduction for covenant subject v 797?

Answer 2

• Only 3 years unexpired so based on investor unlikely to pay a huge premium for tenant covenant
• Bayley & Sage superior to a local tenant but not a major national brand so again wouldn’t expect to see huge investor demand for this v a smaller business with multiple branches

Question 3

What happened at 797 Fulham Rd and how did you relate this to adopted yield?

Answer 3

797 Fulham Road
- Comparable passing rent - reflects £88 ZA
- Comparable unexpired term - 2 years
- Very marginally inferior covenant
- Analysed equivalent yield using target function - based on MR at passing and 6m void
- equivalent showed 5.63%, made a marginal deduction on this 5.50%

Question 4

What happened at 794 Fulham Rd and how did you relate this to adopted yield?

Answer 4

Local juice bar, rent £68.50 ZA
- Inferior location and covenant strength
- Evidence suggested this was an appropriate rent for this area of the pitch - right at the end of the pitch, where it meets Fulham Palace Road which is an inferior pitch
- Also recently let so implied rack rented - calculated equivalent yield of 5.40%
- Low as a result of the unexpired term 6.5 years + RR no break

Question 5

Is it ok that you’ve relied on under offer evidence?

Answer 5

Still category A evidence and sense checked with other transactions

Question 6

New Kings Rd v Fulham Rd?

Answer 6

Evidence suggested lower yields on Fulham Road