Valuation Flashcards
How did you collect your comps for Minstead New Forest?
Increased my search radius because it was in a remote rural location. I sourced comps with a similar array of outbuildings. I made adjustments in line with the 6 steps
Guidance on comparable evidence?
RICS Professional Standard - Comparable Evidence in Real Estate Valuations 2019
Hierarchy of Evidence?
Category A - direct comparables
- completed transaction of near identical property with full and accurate information
- other similar assets with full and accurate information
Category B - general market data to provide guidance
- information from published sources or databases
- indirect evidence
- historic evidence
Category C - other sources
- transactions of other RE assets and locations
- background data
Six steps to collect comparables?
1- collect
2- verify
3- compile
4- Adjust using HOE
5- Analyse to inform value
6- report value and file note
What is the Red Book?
RICS Valuation - Global Standards 2021
A document produced by the RICS to promote and support consultancy among valuation reports across the world
What is the UK National Supp 2018
A document that augments the Global RB and provides mandatory statements for UK valuations.
Structure of the RB
1 - introduction
2 - glossary
3 - professional standards
4 - VPS Valuation technical and performance standards
5 - VPGA Valuation applications
6 - IVS international valuation standards
Term and Reversion - Empress Road
The current rent is capitalised to the next lease event using the reduced ARY.
The reversion is MR capitalised into perp using an ARY, deferred by the term and void period
Why did you use the investment method and not comparable for Portsdown Hill
There was a lack in sufficient VP sale evidence. However there was sufficient rent and investment sale evidence for this property type
What SWOT did you provide for Portsdown Hill?
S - Strong occupier demand in the area
W - not located near any public transport
O - The building could command a premium rent if it achieves high green credentials
T - rising build costs
What is a sensitivity analysis?
A tool used to stress test a development by changes variables such as construction costs and sales values
Why did you cross check the residual appraisal with the comparable method
In accordance with RICS Professional Standard - valuation of development property 2019. Should not rely on one method
Are RB valuations required for internal purposes?
No they are not but can be used if requested.
Mandatory RB?
- secured lending
- financial accounts
- Charity valuations
- CGT, IHT
How do you determine a tenancy’s covenant strength
Duns and Bradstreet rating
Financial accounts
Typical lease terms?
1 Lease Term
2 Break Clause
3 Alienation
4 repairing obligations
5 user clause
6 rent review
7 security of tenure
Inside or outside of the act?
If there is no mention of this, it is assumed that the tenant is protected inside the Act