Instruct an RICS-registered valuer for commercial property regarding investment, bank funding, lease expiry, repair claims, stamp duty or capital gains tax.
COMMERCIAL
Here are some situations where you might require a commercial property valuation:
- Investment Purposes: knowing the market value is critical to making informed investment choices and securing potential returns.
- Obtaining Bank Loans: lenders need to be confident that the property used as collateral provides security in relation to their loan to value ratio.
- Lease Expiration & Repair Disputes: when leases end or disputes arise regarding repair claims an appraisal can offer insight into how the property’s value has been affected.
- Stamp Duty Calculations for Mortgages, Leaseholds or Share Purchases: these are determined by the property’s value having an accurate appraisal.
- Capital Gains Tax (CGT): calculate what you owe on the profit made from the sale of commercial property via a property valuation.
Instructing a valuer to conduct a commercial property valuation is therefore helpful to project management, lease extensions, or freehold acquisitions, which our panel of RICS registered valuers can assist with.
Frequently asked questions
What are different valuation methods are there?
Surveyors employ different techniques to determine the value of commercial properties, such as the income, cost and sales comparison methods. These methodologies are different to residential property valuations.
What is the sales comparison method?
This method involves examining sales data of properties while factoring in elements like age, location and property condition or quality. Additional considerations include variations in sale timing, geographic proximity to landmarks and property size. This methodology proves effective in bustling cities like London.
What is the income approach?
The income approach comes into play when both the cost and sales comparison methods fall short. It consists of three sub methods;
- Gross Rent Multiplier: this method involves dividing the sales price of properties by the gross rent to determine a multiplier for your property’s gross rents. However, limitations may arise due to differences in property expense ratios between properties.
- Direct Capitalisation: in this method the property’s net operating income is applied against a capitalization rate which reflects the market. This rate is derived from sales comparables and takes into account factors like condition and location.
- Discounted Cash Flow: this method involves projecting net cash flows over a period around a decade and estimating the sale price at that point in time.
What is the cost approach?
The cost approach involves determining the construction costs and land value. It considers factors such as structural deterioration and obsolescence, external influences, among others. Additionally the property’s age and economic longevity are considered in this method, which may present challenges for older properties.