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Tilly Rees SoE > Valuation Level 3 > Flashcards

Valuation Level 3 Flashcards

1
Q

What example is PBSA Acquisition

A

Bristol (Gas Lane)

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2
Q

How was it in line with Red Book Global?

A
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3
Q

What is a special assumption?

A

A special assumption is a supposition that is taken to be true and accepted as fact even though it is not true

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4
Q

What is an assumption?

A

-Assumptions are made where it is reasonable for the valuer to accept that something is true without the need for specific investigation

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5
Q

If reporting a SA what must you do before the instruction?

A

Must be agreed with the client at the commencement of the instruction

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6
Q

How was the area not proven?

A

No other schemes and not close to a University

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7
Q

How did you decide on a £10-£15 discount?

A
  • Comparables of schemes not in proven locations had similar discounts
  • considered the specification and amenity too
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8
Q

What demographic advise did you give?

A
  • Strong demand
  • High rental growth
  • Limited supply
  • Tight planning = minimal development
  • High unmet demand
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9
Q

What follow up advise would you give?

A

Once campus built rental tone would improve = proximity to campus

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10
Q

What yield did you use? How did that compare to BIC?

A

5.00%

BIC for super prime was 4.75%

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11
Q

Can you describe the residual method?

A

GDV - (development costs + profit)

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12
Q

What was the site value

A

£16.8m

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13
Q

Accounts Valuation PBSA, Nottingham

A

Guildhall

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14
Q

what is fair value?

A

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date

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15
Q

What is Fair Value in accordance with?

A

IFRS 13 “Fair Value” of International Financial Reporting Standards

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16
Q

What makes a prime macro location?

A
  • Good supply and demand dynamics
  • Relatively tight planning
  • 1 or 2 Universities
17
Q

What makes a prime micro location?

A

Proximity to:
- unis (ideally both)
- amenities
- public transport
- city centre

18
Q

Why were you at a discount to BIC?

A
  • 100% studio led
  • High operating costs
  • some schemes even better micro location
19
Q

What yield did you adopt?

A

5%

20
Q

Why did you advise 100% studio would be softer yield?

A
  • Wider mix = increased occupancy
  • Mixed-use is preferable
  • In a downturn they are likely to be harder to fill
  • Increased operating costs
21
Q

What was the Accounts Valuation Dublin?

A

Montrose

22
Q

What value did you state?

A

Fair Value

23
Q

What was the accounts valuation?

A

Quarterly valuation

24
Q

Why was it in conjunction with Dublin?

A

They work in the local statue, we provide specialist PBSA knowledge.
Ensured we were competent

25
Q

Why had capitalization rates softened?

A

Due to the rental cap in Ireland (capped at the lower of 2% per annum or inflation)
Deters investors
Rising interest rates

26
Q

Is there any other statute to be aware of in Dublin?

A

Primarily governed by the Society of Chartered Surveyors Ireland (SCSI)
KNOW MORE!!!!

27
Q

What is the removal of 51 weeks tenancies?

A
  • Schemes only offering 51-weeks contracts
  • makes it very expensive
  • plan ban 51-weeks only (term weeks with the option of 51 weeks)
  • not in place at the time of valuation
28
Q

When did the law pass and when will it come into effect?

A

July 19th 2024
Applies to any new bookings after 20th July 2024

29
Q

How would the ban on 51-week tenancies impact value?

A
  • potentially reduced rental income during the summer
  • reduced summer occupancy = increased operating costs
  • potential deterrent to investment = yield softening
30
Q

How did the softening of yield impact value?

A

Still increased due to increased NOI
(reduced utilities and increased term income)

31
Q

What were you provided with for the acquisition of Bristol by the client?

A

purchase price

32
Q

Were you competent to value an asset in Dublin?

A

Yes
- In conjunction with the local team in Dublin
- No, PBSA expert in Dublin
- We provide expertise on PBSA valuation
- We value a number of Dublin assets for accounts purposes so we know the market well

Tilly Rees SoE (42 decks)

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