Val Case Study Flashcards
Why did you value on a headline basis?
Because that was the structure of the reversionary lease agreed with the tenant. I was explicit about rent free.
The rent free’s for all the comparables weren’t available. I valued on a headline basis and deducted the rent free from the rent and worked this into the valuation.
How were you introduced to the client, where did the instruction come from?
It was a key client of the company and we are on their panel. This Request for Proposal came through their ‘PAV’ system - effectively an automated fee quote request system
How did you build a relationship with the client?
Regularly updated the client informing them of when the report will be finished by & if we needed any further information. We arranged a phone call to introduce when the instruction was agreed. In retrospect, it would have been useful to speak to the client before submitting the quote to get more information on the property, share market intel etc
What was the property’s service charge psf at the time of instruction?
It wasn’t directly relevant as we weren’t asked to provide VP value and the tenant was responsible for s/ch so not impact on value. Would have been £1.00-£2.00 psf
Why was the tenant’s mezzanine to be disregarde?
Authorised tenant improvement - I did not see a licence for alteration but advise of this by the borrower/landlord
As the property is semi-detached who would be responsible for repairs in the roof?
Depends on the repairing liability clause within the lease
How did you assess the reversionary lease terms to establish their appropraiteness?
We checked by reference to other open market transactions and concluded that they were.
If there had been a longer period to expiry of the lease, e.g. 1 year, how would this have affected the valuation approach?
I would have used Term and Reversion (as the lease was reversionary).
