Summary of Experience

Question 1

What are some of the key inclusions when using NIA for measuring offices?

Answer 1

Kitchens
Area occupied by perimeter trunking or skirting boards
Area occupied by non-structural walls subdividing units with a single tenant
Usable areas occupied by built-in cupboards and the like

Question 2

What exclusions did you make when measuring on NIA basis?

Answer 2

WCs
Stairwells
Plant/lift rooms
cleaners’ cupboards
columns
areas under 1.5m

Question 3

Hotel Acq: what are some of the key metrics investors consider when analysing hotels?

Answer 3

Rent cover
Revenue per available room (RevPAR)

Question 4

What was the rent cover?

Answer 4

2.23 which compared favorably to the market standard of 1.8-2x

Question 5

Soho Office Negotiation: what was the outcome?

Answer 5

5-yr term, 3 year tenant-break @ £78.50 psf

Question 6

What is the difference between a lease and licence?

Answer 6

A lease involves exclusive occupation and is for a defined term over 6 months, whereas a license can be terminated at any time

Question 8

City office acquisition: what was your client’s budget/what were they looking for?

Answer 8

-Wanted to be in close proximity to Liverpool Street Station
- wanted 4,000 sq. ft.
- were happy to pay top rents (i.e. > £80 psf.)
- were looking for extensive end of trip facilities
- preference for CAT so they could implement their own bespoke fit out

Question 9

What are prime rents and yields for London city offices?

Answer 9

£82.50psf / 5.75%

Question 10

Covent Garden disposal: what was the rental premium for fully fitted space? What are prime rents in Covent Garden?

Answer 10

£15 psf
Prime rents - £87.50 psf

Question 11

Soho office disposal: what were your quoting terms?

Answer 11

£90 psf; rates - £28.50; s/c - £10

Question 12

Leeds retail letting: what was the rent achieved?

Answer 12

£130 zone A (£50 on a global basis)

Question 13

What use class is retail?

Answer 13

Use class E

Question 14

Reading valuation: describe the asset

Answer 14

Modern steel portal frame warehouse, with electric roller doors, 8.5m eaves height and three phase power

Question 15

Reading valuation: what assumptions did you make?

Answer 15

That it was rack-rented at £12.50 psf
Yield of 5.20%
6 & 6 void/rf
Assumed compliant with planning use
Assumed no capex required due to being very new

Question 16

Self Storage Huddersfield - you mention the store was in poor condition - what does this mean?

Answer 16

-Signs of damage to brick cladding (e.g. spalling); water ingress on ground floor

Question 17

What makes a good self storage stores?

Answer 17

-Prominent location with good roadside visibility
- Large, affluent population within a 15-minute drivetime
- Sufficient parking and loading door provision
- high eaves height in order to increase MLA

Question 18

Self Storage Huddersfield - what assumptions did you make?

Answer 18

• Applied higher list price growth of 2.5% p.a. to reflect stabilised occupancy (87.50%)
• Applied exit cap rate of 5.75% to reflect poor condition of store
• List price £18.50 psf
• DR: 8.50%

Question 19

Self Storage Sidcup - on what basis did you measure the store?

Answer 19

GIA - includes internal walls and service areas

Question 20

Self Storage Sidcup - What assumptions did you make?

Answer 20

• £30 capex to increase MLA
• 6 months to stabilise (was already at 80% occupancy)
• List price £27.50 (2.0% growth year 1 then 2.5%)
• exit cap 5.50%
  -DR - 8%

Question 21

Retail Val Kensington - what assumptions did you make?

Answer 21

Rack rented at £65 psf (global) and £950 ITZA
Capitalised at 6%

Question 22

Hotel acquisition - what assumptions did you make?

Answer 22

Comfortable with rent cover (was 2.2x vs standard 1.8-2x)
good RevPAR (117)
rent per key - £9,000
1-4% cap and collar cpi linked annual rent reviews (applied in line with cpi forecasts)
30-year sale and leaseback
IY - 4.25%; EY 5%
Asset target return: 5.50% - met this by year 10

Question 23

How do you calculate rent cover?

Answer 23

NOI/Rent payable

Question 24

How do you calculate RevPAR

Answer 24

ave rate/ave occupancy

Question 25

What are prime regional hotel yields?

Answer 25

5.50%

Question 26

Nottingham auction - why auction?

Answer 26

-Efficient method of disposal
- potential for competitive bidding between special purchasers
- small lot size

Question 27

Supermarket acq. - what assumptions did you make?

Answer 27

• strong location, with good competition and limited local competition
• annual cpi-linked uplifts with cap and collar for 18 years
• £50psf capex
• pushed out exit to reflect overrent

Question 28

Office disposal, Cam - assumptions

Answer 28

• £50 psf capex
  12/9 void; r-f assumption
  £5psf rental uplift