Commercial Property Valuation and Analysis

The assignment involves analyzing the valuation of a retail corner shop and a banking chamber. It requires a thorough examination of the properties' market value and rental rate, as well as an evaluation of the current market fair value and deferred price of the shop. The report includes recommendations based on the analysis, highlighting the better option between the two properties.

Commercial Valuation

Table of Contents
Executive Summary.........................................................................................................................1
INTRODUCTION...........................................................................................................................1
FINDINGS.......................................................................................................................................1
Instruction...................................................................................................................................1
Location and Land.......................................................................................................................2
Improvement...............................................................................................................................2
Market overview.........................................................................................................................3
Valuation Rationale.....................................................................................................................3
Date of Inspection and valuation.................................................................................................4
Conclusion ......................................................................................................................................4
Recommendations............................................................................................................................4
REFERENCES ...............................................................................................................................5

Executive Summary
In this project report, current fair market valuation of BANKING CHAMBER – 197
MONA VALE ROAD ST IVES and RETAIL PREMISES BEING LOT 1 IN STRATA PLAN
564212 AT 201 POINT PIPER ROAD, POINT PIPER is discussed.
INTRODUCTION
In business world, the commercial property valuation is related to the evaluation of worth
of various types of commercial monuments such as industrial land, building, retail centres and
office premises (Kojima and Koplow, 2015). The revenue valuation approach is generally
applied to market values of commercial property in which the key cost factor is determined by
the productivity of the companies that use the buildings and not just the land and buildings
themselves.
In this project, valuation summary of both property a corner shop at point piper road and
banking chamber at Mona Vale road is compared and contrasted on the basis of different
variables. Apart from this, valid justification and proper recommendation is provided according
to the finding.
FINDINGS
Instruction
As in the context of banking chamber the actual instruction was provided on 31st aug
2003 from the landlord regarding the valuation of present market rental value of the respective
place which is located at 197 Mona Vale Road St Ives (Körner and Sivula, 2019). On the other
side, the instruction related to valuation of retail premises was gives by 27th June 2000 which is
given by Mr Frank Vanos so that actual and real fair value can be determined on 30th June 2000.
For the banking chamber the title recorded was Lots A and B in Deposited Plan 387387 under
the Folio Auto Consol 7427– 212 and the ownership has to be recorded in name of Albert and
Savina Lombardo which were joint tenants. For subject property that is retail premises the
current title records were Lot 1 in Strata Plan 564212 at Point Piper in which first ownership
record is for Turnkey Holding Pty Ltd and second registered lease in favour of S and I Drinker
Pty Ltd that is under the local Government Area the Woollahra.
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Location and Land
From the information provided it is founded that the property on Point Piper road is
situated upon the east side and at the end of Mitchell road. Point Piper is Sydney's prestigious
eastern community, situated on the coast and about 3.5 KM east of Sydney CBD and near to
most infrastructure, amenities and services. According to the land consideration the location for
Stratra plan is designed in a pleasant manner with number of front street on both side of road and
the land is levelled and easily accessed from the road. There are number of services such as
electricity, town water, gas, sewer which are associated with point Piper road. Depending upon
the basis observation it has been evaluated by the inspection manager that there is no site
contamination and problems with the land of this property. On the other side for banking
chamber it has been determined that land have a frontal direction to Mona Vale road that is
followed by Wade Lane at the backside. The exact dimensions of road is 14/12.42 x 30.58/32.23
metres which seems to be like a rectangular designed box (Lienhoop and Brouwer, 2015). The
Mona Vale Road at St Ives is Sydney's major northern express-way, a properly developed,
powder-sealed, six-lane roadway with cement walkways, pavement barrier and edge and gutter
line both sides of the road. From the entire supportive document and general observation it has
been determined and valuations are marked assuming that the site do not have any kind of fault
or contamination with land.
Improvement
It is been founded from the valuation report of banking chamber that it was build in 1965
with a concrete slab and the office was painted, strength by steel and skillion roof which occupy
the whole building. In 2002 the entire building has undergone the interior and exterior
development in which improved main counter and additional security screening, elevated level
flooring, new floors for a large number of facilities, the introduction of a separated office and
storage area and the development of a special toilet to the existing men and women property. In
the Mona vale bank there is security door which is near customer section which help to keep a
regular check on non public region of the office. The backside of the allocation is a substantive
stand with parking facilities for four vehicles. Two areas are accessible even under a canopied,
enclosed carport, one is protected.
On the other side, for point piper shop there are two office one is of grocery and other
one is pharmacy, in which the pharmacy have a furnished floor made up of timber and is serve as
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a dispensary. While the grocery business makes use of remaining par of the floor and there are
movable counter, two separate single stainless sinks and refrigerators with two cool room
attached with one another (Volkova, Neznamova and Kuleshov, 2017). It was also founded that
the total area is not considered at the time of lease and have been measured later which was
further resigned against the Strata plan and the total floor area of shop is around 163.59 Sq m.
Market overview
Comparison of Market overview provides more clear picture about which property
investment would be more viable (Sarkki and Karjalainen, 2015.). Here market area of point
piper shop is suitable for commercial sales. In this area rents for IInd hand building-premises are
increasing at rate of 5% p.a., that is in-line with fixed common-review and underpinned terms in
leases. For the short term, rises in rent in the order of 5% are expected to continue. For short
period, such increase in rent is expected to be 5% in coming period. On other hand, in area of
commercial bank rentals for IInd hand building-premises is also approx 5%. Cyberstats, the
Property Council of Australia’s statistical arm reported that aggregate CPI rise since subject
recently reviewed to market is approx 4.43% for period Sep. 2002 to June-month 2004. In this
area retail market is in bloom and enjoying greater appreciation rate than the other properties.
Thus, it has been founded that in shorter period of time the growth if retail premises will remain
constant and have a greater impact with rents that will keeps on increasing from the previous
year.
Valuation Rationale
The Foreign Valuations Standards Committee (IVSC) describes market value as the best
possible price with which the property value could be predicted to be priced at the appraisal date
(Shapiro, Mackmin and Sams, 2019).For both the reasons of this assessment, concern was
provided to the individual's scale, quality and location and subsequent review and modification
of the selling and property management of related and equivalent property in the area. In the
context of retail premises at piper point road the main evaluation approach is the process of
capitalization using a value unit method. The cost factor is the gross income that is denoted in net
$/sqm. It is decided in compliance with the requirements and concerns raised in the context of
this document and on the grounds that the property, their purposes and the rentals thereof are not
impaired by any subject besides the one stated in this report. It has been informed about the
variations in place reliability, performance of upgrades, scale and layout of facilities, possible
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traffic flows, and open parking infrastructure while evaluating comparable rates. On the other
side, it has been founded that the weighted figures are conservative because they are not treated
as quantity that are included while making improvement with roof of the property. It has been
also assumed that the length, position and location of the object has been consider for the
objectives of this assessment (Trugman, 2016.). There is use of modified direct correlation
methodology of specific and equivalent commercial property sales in the region. When
evaluating these significantly higher rates, at the time of valuation it has been decided that
awareness of variations is compulsory such as site size and quality, service value, size and place
appearance, parking availability, probable traffic flows, rental type, contract period, and exiting
care. They used a unit of value method to comparative evaluation as a criterion of value for the
demised assumptions (Vanneste, 2015). This cost unit is $/sqm p.a. net rental. Due to the absence
of independent market lease material related to reserved car parking, the whole unit price method
was used by the valuator in which it does not find any connected specific element for the
specialized parking provided by the issue. We should implement a factor of 5 percent p.a. in our
corresponding comparative rental research and in accordance with industry trends. To
extrapolate and interpolate a similar row against existing transfers and reports made between
2002 and 2004.
Date of Inspection and valuation
Form the valuation report of banking chamber the date of inspection was 2nd September,
2002 and the valuation date was 22nd October, 2004. For the other property which is retail shope
at point piper shop, it has been founded that the date of inspection was 28th June, 2000 and date
of valuations was 30th June, 2000.
Conclusion
From the above, report it has been concluded that its it necessary to implement the best
and authorised method for completing valuation of any commercial property as it support in
defining the current market value of properties. It is also concluded that accordingly the
determination was made beyond awareness of object of property that may be found within the
operational documents of the company. It is also anticipate that there were no such issues within
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any document of both property documents that may adversely affect the value or financial
success within the entire life period.
Recommendations
From the above report it has been recommended that retail corner shop at point piper road
is a better option because the value is increasing year by year at a greater extent as compared to
property of banking chamber. Such as from the entire qualifications it was identified that current
market fair value of shop at the date of valuation of $810,000.00. While on the other side the
current fair market rental value of banking chamber on the date of valuation was $104,920 p.a.
plus GST. When we equate this to the revised pace for the topic themselves, when one-to-factor
two-year development at 5 percent p.a. will then add a deferred price of $421.28 pa. We think
this promotes our $430.00/sqm discovered value. In the context of Mona vale bank the surveyor
did not search the administrative documents due to which there is huge difference in the
valuation figures. This determination is therefore rendered without understanding of subjects that
may be found in the administrative documents of the entity and on the presumption that these
documents do not include these matters,
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REFERENCES
Books and Journals:
Kojima, M. and Koplow, D., 2015. Fossil fuel subsidies: approaches and valuation. The World
Bank.
Körner, E. and Sivula, S., 2019. Commercial Real Estate Valuation Based on Modern
Technology Solutions: Case Study in Helsinki, Finland.
Lienhoop, N. and Brouwer, R., 2015. Agri-environmental policy valuation: Farmers’ contract
design preferences for afforestation schemes. Land Use Policy, 42, pp.568-577.
Sarkki, S. and Karjalainen, T.P., 2015. Ecosystem service valuation in a governance debate:
Practitioners' strategic argumentation on forestry in northern Finland. Ecosystem
services, 16, pp.13-22.
Shapiro, E., Mackmin, D. and Sams, G., 2019. Modern methods of valuation. Estates Gazette.
Trugman, 2016. Understanding business valuation: A practical guide to valuing small to medium
sized businesses. John Wiley & Sons.
Vanneste, T., 2015. Global trade and commercial networks: eighteenth-century diamond
merchants. Routledge.
Volkova, M., Neznamova, A. and Kuleshov, G., 2017. Legal nature of the result of the contract
for the valuation as an object of civil law. Economic and Social Development: Book of
Proceedings, pp.853-859.
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