Summary of experience questions- core comps

Question 1

Talk us through how you carry out a risk assessment on your site H&S inspections

Answer 1

Yes I would review site for any hazards
If identified, I would consider what the possible risk is off that hazard- eg fall from heights
I would consider the likelihood of that risk occurring- is the site very rural or in a built-up area
I would then be able to determine how much or a risk it is an make an instruction based on that. If it is very high risk, I would instruct that it is addressed within 24hr or if not perhaps anywhere between 2days- 2 weeks.

Question 2

Talk us through the hazards you identified at Crosbie WTW and how you dealt with these?

Answer 2

Site fence had a gap- high-risk of someone getting in. Caravan Park near, possibly of wandering teenagers.
Crosbie’s roof has been removed as a H&S measure already, but it was clear that the brickwork at the top of the building was not sound as some has already fallen off. (high-risk) while rural we do have a fishing club at the reservoir just up from the site and its not unthinkable that you could potentially get some curious person having a snoop around the site
There was also a number of chambers without padlocks on them.

Question 3

3. What sort of things did you consider when reviewing Assynt for disposal?

Question 4

How would you identify Japanesse Knot weed or other invasive species ? what are they? and what would you do if you thought it was present on site?

Answer 4

Japanese knot weed- green/purple hallow stem and green leaf’s
giant hogweed- green stem, white flowers.
Himalayan Balsam-green stem, purple/pink flowers

take photos, google images, get checked by expert and then prevent further growth and arrange safe and appropriate removal.

Question 5

What are the 5 types of property inspections and can you give us an example of carrying out one?

Answer 5

its actually 4 but I have referred to 5 in example

1. .aquistion
2. .occupation- think h&S
3. .disposal
4. .developement

Question 6

what guidance do you consider when carrying out an inspection

Answer 6

RICS surveying safely 2019
RICS guidance note on technical due diligence 2020
SW 10 life saving rules
H&S at work act 1974

Question 7

What does the code of measurement practice say about accuracy?

Answer 7

They must be accurate. They must not mislead.
An accuracy allowance of 10% +/- may be acceptable
It is worth always considering:
• What am I measuring?
• Why am I measuring?
• What are the conditions of day of measurement?
• What are the ramifications if the measurement is not accurate?
• Am I using the appropriate measurement tool

Question 8

What sort of information should be included in a measurement?

Answer 8

• Purpose
• Basis/standard used
• Method of measurement- the tool used
• Unit of measurement
• Measurement tolerance
• Date of measurement
• Inclusion of calculation (not sure if this is essential?)

Question 9

How do you ensure accuracy of measurement?

Answer 9

• Ensure that I have selected the correct basis of measurement for the purpose of the measurement
• Ensure that my measurement tool is working correctly. Test it with a measuring tape.
• Ensure I accurately record all measurements on the day
• Carry out full calculation in a calm environment and review guidance on inclusions and exclusions
• Get a senior colleague to check if you are unsure/not confident with final number
Carry out full calculation when in a good environment and always double check guidnace on inclusions and exclusion

Question 10

What is RICS guidance on the types of measurement surrounding the old basis and new IPMS?

Answer 10

Must follow RICS property measurement 2nd ed which incorporate imps for Residential and Office and must be reported for these types of buildings. Candidates can dual report if requested by a client or make a departure if can be justified. IPMS retail and industrial has been published but not adopted yet.

Question 11

How did you go about measuring Castle House? What were the key inclusions and exclusions?

Answer 11

Castle house was being measured for two purposes:
Castle house was measured in line with IMPS 3, which is the floor area available on an exclusive business excluding standard facilities and shared circulation area. The floor area was measured to the internal dominant face.
The inclusions were: Internal walls, columns
Exclusions: stairs, lifts, cleaning cupboard and plant room
Included by stated separate: nothing but this would be balcony, covered gallery and roof terrace

Question 12

Why was IMPS used and not NIA?

Answer 12

IMPS for office has now been adopted as the new property measurement standard, you may dual report if requested or depart from the guidance if there is proper justification in line with the guidance

Question 13

How did you go about measuring the NIA and GEA of Whittingehame WTW? What were the key inclusions and exclusions?

Answer 13

NIA- measures usable area which is any area that can sensibly be used in connection with building purpose. I measured to the internal face. I excluded the columns and toilet. I included the stairs and corridor because there were both located in usable spaces.
GEA- The area of the building measured externally on each floor. I did so by measuring the building from the roof as it was built into the embankment. The full footprint could be measured from above. I excluded the external stairs leading to the roof.

Question 14

What measurement basis would you use for an industrial building?

Answer 14

It would depend on what the purposed of the measurement was for- for estate agency or valuation it would be GIA or NIA but rating it would be GEA

Question 15

What is the key difference between NIA and IMPS

Answer 15

The measurement for IMPS will be larger

The measurement for IMPS is taking to what is called the internal dominant face this could be window glazing if that makes up more than 50% of the floor to ceiling area. NIA measurement is taking to the internal wall which is the brick or blockwork.
All columns are included
There are no exclusions for height restricted areas of less than 1.5m

Question 16

What are the new IMPS basis for the old basis?

Answer 16

They are not direct replacements but generally speaking
IMPS1- GEA -planning apps, costing work
IMPS2-GIA- property man, efficiency of use, benchmarking
IMPS3-NIA- estate agency and valuation

Question 17

Can you talk us through the measurements for the WWTW rating valuations? What were the inclusions and exclusions?

Answer 17

GEA is used for WWTW
But you would also need height of the individual components to establish volumes to calculate the replacement cost.
WWTW are value on a DRC basis because there are no comparables
Exclusions: apparatus that was obsolete were excluded, only apparatus from first screen is included because sewages are not rated, and Pumping stations are considered part of sewars.

Question 18

What are the 5 valuation methods

Answer 18

comparison, investment, DRC, profit, and residual

Question 19

What was the key info acquired for the DCF at alt Mur Hydro?

Answer 19

Accounts since start of operations, proof of FIT (till 2035), planning permission info, copy of the lease (2015-2065) and records of power generated

Question 20

Why was a DCF used

Answer 20

The owner of Alt Mur hydro required a valuation for lending. A discounted cash flow is a form of investment valuation. We used this because we had a cash flow over a finite period.

Question 21

How did you approach the DCF?

Answer 21

We projected the cash flow over the remainder of the leaser period using the assumptions we could derive from the information gathered:
• Average capacity x capacity factor x hours per year= annual outfit
• then annual output x income for Kwhr= income from electricity)
• Projected income from FIT
• Added FIT and annual income from electricity to arrive at total income
• Projected maintenance and operating costs and Projected upgrading costs to work out totally expenditure
• Deducted expenditure from projected income to get EBITDA
• Discounted the EBITDA at a discount rate of 6.5% to arrive at NPV

Question 22

How did you identify the discount rate for the DCF?

Answer 22

From comparable evidence of other renewable energy schemes

Question 23

How would you identify the discount rate if you didnt have comps from galbraiths

Question 24

How did you identify the GDV for the residual valuation for Langloan

Answer 24

This was identified from comparable evidence. The land immediately surrounding SW site has also been recently developed so this provided strong comparables for house prices. I worked out what size of house our site could accommodate and how many based on the comparable plot sizes and then the likely prices of those.

Question 25

How did you identify if there was a marriage value or not?

Answer 25

Yes I did and there was a marriage value identified of 100k. SW title area required more remedial work as bulk of tank is situated on our land and our site area along could only house 1 large home as It was quite large enough for 2 whereas the whole site could house 3 homes.

Question 26

What were the deductions for the residual valuation for Lang loan

Answer 26

GDV less selling fees
Less construction and fees- site prep,planning,building cost, professional fees, contingency, developer profit, finance on construction (s line)
Gross RV less finance on site purchase 
Less acquisition costs for legal 
=residual value

Question 27

What were the deductions for the residual valuation?

Answer 27

•	Remedial work to level the site
•	Planning app and S75
•	Construction costs of £1500 per m2
•	Professional costs – architects planners etc
•	Profit
•	Contingency
•	Finance on construction 
To get Gross RV
•	Less finance on site acquisition 
•	Less squassation costs 
To get Net RV

Question 28

What was the excambion deal made at Luss and how were the different elements assessed?

Question 29

What was the excambion deal made at Luss and how were the different elements assessed?

Answer 29

In exchange for SW receiving the ownership to land we currently occupied with a WTW Luss estate would receive 2 different properties and 1 share of an access and 1 right of access.

All 5 elements were valued on a comparable basis

• Helensburgh WTW- land to be transferred to SW
• Helensburgh DIR- to be transferred to Luss
• Luss DSR- to be transferred to Luss
• Luss WWTW- 50% share to be transferred to Luss
• Tarbert- a right of access to be granted in favour of Luss

Question 30

what does the RICS red book cover ?

Answer 30

contains mandatory rules, best practice guidance and related commentary for all members undertaking asset valuations.

Question 31

What is the minimum requirement of a valuation report?

Answer 31

1. ToE
2. Inspection, investiagtion records
3. valuation report
4. basis of valuation, assumptions, special assumptions
5. valuation approach and method
6. date of report

Question 32

How would you account for land contamination in a valuation?

Answer 32

if you are aware of contamination you must take this into account as part of valuation

1. ensure any appropriate environmental or soil report has been carried out by specialist to understand extent of contamination and remedial work required to make land safe
2. carry out valuation by deduct cost of remedial work needed from value
3. cavat report to state your relying on information from environmental/specialist report

Question 33

Who is responsible for contamination

Answer 33

The polluter

Question 34

what is a special assumption

Answer 34

It is an assumption you would make within a valuation. Something that is not true but could be. For example a client may be thinking of upgrading the spec of their office from grade B to A so they may ask you to value it assuming its grade A space to understand the value

Question 35

How would you value a leasehold property held on a ground lease of 100 years?

Answer 35

Value the leasehold and ground lease interests separately.

Question 36

What is an equivalent yield?

Answer 36

It is somewhere between an initial yield and reversionary yield. It encapsulates the DCF of a property with rents rising and falling

Question 37

How would you identify the yield for a valuation?

Answer 37

Consider the type of valuation your undertaking
Then consider comparable evidence
Income/cost x100=yield

Question 38

What is an onerous lease clause that might affect value

Answer 38

Use- if the use is really restrictive this might be rather onerous
Alienation- if no assignation or subletting allowed
rent review provision- yearly rent reviews in a market where 5 yr reviews are the norm

Question 39

What is the key differences between GIA/NIA and IPMS and 3

Answer 39

IPMS is:
measured to internal dominant face
includes columns
included height restricted areas of 1.5m and less

Inclusions and exclusions for IPMS 2 & 3 are the same

included but stated separate
covered galleries
balcony
roof terrace

exclusions:
space above atrium
external parking 
equipment yard
patio

Question 40

What are the New Rules of Measurement

Answer 40

Only relevant for cost management and construction

Question 41

What are the different types of yields

Answer 41

Initial Yield- income/capital cost x100
Net yield- the yield accounting for purchasers costs
Gross yield- yield not accounting for purchasers costs (think auction)
ARY- used for a fully let property at market rent. Needs to consider all risks associated with that lease eg. location, covenant strength, use, lease terms
Revisionary yield- over rented properties so current rent/value x 100
Equivalent yield- the average weight yield when valuating a revisionary property using a revisionary yield and an initial yield
True yield- assumes rent is paid in advance
Nominal yield-assumes rent is paid in arrears