Submission Questions - Valuation

Question 1

In your L2 Romsey example what were the headline lease terms that you summarised ?

Answer 1

Covenant - N2 (Moderate risk)

Term - 15 years

Rent review - 5 yearly (upward only)

Repairs - full repairing and insuring lease

Insurance - tenant to reimburse

Use - permitted use only (Sui generis)

• Whether inside act
• Alienation clause meant total prohibitation from assigning or sublet
• rent 51k
• rent payment frequency (quarterly in advance etc)

Question 2

What was the D&B rating of the tenant?

Answer 2

N2 (moderate risk)

Question 3

What do you mean by the term “rack rented”

Answer 3

The property had recently been let in an arms length transaction at the MR.

I cross checked this with comparable evidence.

Question 4

What is a net initial yield ?

Answer 4

Annualised rent
Net of costs
Expressed as a % of cap value
After adding notional purchasers costs

Question 5

With your L3 Thatcham example did you consider any incentives for the property?

Answer 5

This particular property had no new build incentives and this remained consistent with the comparable evidence.. however I underhand that these can be specific to property itself or Monterey such as bespoke kitchen fittings and tilling, wooden floors, SDLT payments or legal fees.