Sample Assignment on Economics in Uk

ECONOMICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
(i) Details of property and of major clauses of leases.................................................................1
(ii) Details of transactions on other properties..........................................................................14
(iii) Details of rating scheme.....................................................................................................24
CONCLUSION..............................................................................................................................27
REFERNCES.................................................................................................................................28

INTRODUCTION
In way of allowing the periodical adjustment of all the commercial properties available in
market level at the current date of review as agreed by landlord and tenant notified in rent review
clause in commercial lease will be known to as rent review (Dolan and et.al., 2016). Although
before this it will be very much essential to value that rental property that too at fair market price
at time of renting. So the practitioners of United Kingdom for market valuation will not be
practicing contemporary approach and rather utilising conventional one. In 3rd quarter of 2017
the value of commercial properties of UK at its prime location increased on an average of 0.7%.
These movements which are the upward and downward slope will be mostly depended upon the
performance of industrial sector. While the all shop sector recorded a fall down of rents of prime
locations by -0.3% in the 1st quarter of 2018.
So in this particular assignment discussion will be done on major clause of lease that are
all available in UK with details given from the property and other situated near by with that of
rating scheme as well. Under this project brief discussion will be made on how properties are
valued and how their rents are calculated given their rent review period and present conditions as
well.
MAIN BODY
(i) Details of property and of major clauses of leases
Under this assessments there are majorly 2 of the prime and main properties and both of
them need to be valued in order to take out the actual and current rent of them (Kavetsos,
Dimitriadou and Dolan, 2014). Both the two properties are in the main shopping street
surrounded by 4 other comparable properties on this street. So the details and valuation of both
subject properties are as follows:
Subject property 1: 72 High Street
This particular is a three storey building including basement, ground and first floor which
was built in 1900. The subject property is mainly occupied by ladies wear shop as it is in main
shopping street of provincial market town which also has store rooms, other accommodation but
in this valuation area of toilet will not be included. The overall internal and external premises of
this particular building are very much shabby and untidy which will be calling for further clean
up. All the work by tenant on this building was renewed on timely bases which were entirely
done only after taking prior written consent of the landlord (Reeves and et.al., 2017). Like about
1

25 years ago rear of ground floor of the building premises was extended with about 6.15 meter
till the present depth of over 29.03 meter. This property’s current lease is 42 years ago which is
too old and not as per the current or modern transactions so its valuation is very much necessary.
The other terms of lease will be including like that of the current rent of this building is £60000
p.a. with the terms for 99 years. This rent will be reviewed every 14 years value of rent will be
£2000 p.a. higher than that of market value (Ringø and et.al., 2016). It was also included in the
lease terms that all internal repairs and insurance will be responsibility of tenant only while
landlord will be answerable for exterior and structural repairs and maintenance.
VALUATIONS: CONVENTIONAL, DCF, REAL
DATA
ERV £62,000
Rent £60,000
Years to review 14
Equivalent/initial yield 6.80%
Risk free rate 1.32%
Bond premium 1.00%
Property premium 2.00%
Fixed rent return 2.32%
Required return 3.32%
Overage risk premium 1.00%
Rent review period 99
Purchase costs 6.50%
Void Period 0
2

Figure 1: Subject property 1: 72 High Street
Interpretation:
From the above table it could be concluded that rent of this property is £60000 while it is
estimated to be £2000 higher than market value which will be summed up to £62000 with years
to review will be 14 years. So including all the other factors like that of initial yield (6.80%), risk
free rate (1.32%), bond premium (1%), property premium (2%), fixed rent return (2.32%),
required (3.32%), overage risk (1%), rent review period (99 years) and purchase cost (6.50%).
CALCULATIONS
DCF/real
Implied growth over review -2554.05%
Implied growth per annum -203.29%
Inflation risk free yield -200.03%
Arbitrage
Implied growth over review -1677.07%
Implied growth per annum -202.83%
Inflation risk free yield -199.51%
Interpretation:
3

The table will be interpreting the results showing calculations of arbitrage and DCF or
real valuation. Under this implied growth over review period will be -2554.5% while per annum
growth will be -203.29% and inflation risk free yield will be -200.03%. All these things will be
calculated based on discounted cash flow techniques (DCF). While on other hand arbitrage also
calculation was done of implied growth over review (-1677.07%) and per annum (-202.83%)
with the inflation risk free yield (-199.51%). Which shows that there is very small difference
between both of them methods of DCF and arbitrage.
CONVENTIONAL EY VALUATION vertically sliced
Term:
Rent passing £60,000
YP 14 @ 6.80% 8.8513
Capital value £531,080
Reversion:
ERV £62,000
YP perp @ 6.80% 14.7059
Projected value £911,765
PV 14 @ 6.80% 0.3981
Capital value £362,982
VALUATION (ignoring PCs)
839494.875
1 £894,062
Initial yield 6.71%
Reversionary yield 6.93%
Interpretation:
The capital value of this property as per conventional EY valuation will be £531,080 if
the rent review will be for 14 years if it is valued at £60000. On other hand if it is done based on
£62000 then the capital value will be £362,982 which is less than the above one. Then if
Purchase cost is been ignored than valuation will be very higher to as £894,062 whereas initial
yield will be 6.71% and that of reversionary yield it would be 6.93%.
DCF VALUATION
4

Term:
Rent passing £60,000
YP 14 @ 3.32% 11.0536
Capital value £663,214
Reversion:
Projected ERV
(ERV * (1+implied
g)^ 14 £97,486
YP perp @ 6.80% 14.7059
Projected value
£1,433,61
3
PV 14 @ 3.32% 0.6330
Capital value £907,508
VALUATION
£1,570,72
2
REAL VALUATION
Term:
Rent passing £60,000
YP
1
4 @ 3.32% 11.0536
Capital value £663,214
Reversion:
Projected 'real' ERV £62,000
YP perp @ 6.80% 14.7059
Projected value £911,765
PV
1
4 @ -200.03% 0.9953
Capital value £907,508
VALUATION £1,570,722
ARBITRAGE VALUATION
Term:
Rent passing £60,000
5

YP 14 @ 2.32% 11.8380
Capital value £710,280
Reversion:
ERV £62,000
YP perp @ 6.80% 14.7059
Projected value £911,765
PV 14 @ -199.51% 1.0714
Capital value £976,851
VALUATION £1,687,132
EY Horizontally sliced
Bottom Slice Rent £60,000
YP perp @ 6.80% 14.7059
Capital value £882,353
Top Slice ERV - Rent £2,000
YP Perp @ 6.80% 14.7059
PV 14 @ 6.80% 0.3981
Capital value £11,709
VALUATION £894,062
REVERSE LAYER/HARDCORE
(Core and Top Slice)
Bottom Slice ERV £62,000
YP perp @ 6.80% 14.7059
Capital value £911,765
Top Slice Rent - ERV (£2,000)
YP 14 @ 4.32% 10.3434
Capital value (£20,687)
£891,078
6

TR VALUATION
Term:
Rent passing £60,000
YP
1
4 @ 5.80% 9.4112
Capital value £564,671
Reversion:
ERV £62,000
YP perp @ 6.80% 14.7059
Projected value £911,765
PV
1
4 @ 6.80% 0.3981
Capital value £362,982
VALUATION £927,653
871035.7712
LAYER/HARDCORE
Bottom Slice Rent £60,000
YP perp @ 6.80% 14.7059
Capital value £882,353
Top Slice
ERV -
Rent £2,000
YP Perp @ 8.800% 11.3636
PV 14 @ 8.800% 0.3070
Capital value £6,978
VALUATIO
N £889,331
EY Quarterly in Advance
Bottom Slice Rent £60,000
YP perp @ 6.80% 15.3257
Capital value £919,545
7

Top Slice
ERV -
Rent £2,000
YP Perp @ 6.80% 15.3257
PV 14 @ 6.80% 0.3981
Capital value £12,203
VALUATION £931,747
SUMMARY
Valuation after PC Initial Yld Reversionary Yld
Conventional £839,495 6.71% 6.93%
DCF £1,474,856 3.82% 3.95%
Real £1,474,856 3.82% 3.95%
Arbitrage £1,584,161 3.56% 3.67%
Layer/hard core £839,495 6.71% 6.93%
Reverse layer £836,693 6.73% 6.96%
EY q in a £874,880 6.44% 6.65%
Interpretation:
The valuation of rent of this particular property as per the given various methods is
coming different from each valuation methods like that of EY horizontally sliced, reverse layer
and hard-core, TR valuation and layer or hard-core methods. While the most accurate or correct
valuation of rent will be coming from DCF valuation which is about £1570722 as this technique
is mostly used throughout UK. While on other hand conventional valuation methods will also be
very authentic at initial yield of 6.71%.
Subject property 2: 65 High Street
This building was built up in 1980 having ground and first floors which is since 9 years
ago rented to Tiny Tots for over 20 years currently valued at £110000 p.a. the property is in good
condition on both internal and external premises (León‐Ledesma, McAdam and Willman, 2015).
Some of the major clauses of the lease agreements will be like for the exterior insurance or repair
and maintenance landlord will be responsible, while for internal repair tenant is accountable. So
all these it is required to adhere with so that valuation could be accurate and correct in all respect
with the required different methods. There are many methods which will be used to calculate the
actual value of rent of 65 high street subject property like that of conventional, DCF and real
valuations.
8

VALUATIONS: CONVENTIONAL, DCF, REAL
DATA
ERV £120,000
Rent £110,000
Years to review 1.6
Equivalent/initial yield 6.80%
Risk free rate 1.32%
Bond premium 1.00%
Property premium 2.00%
Fixed rent return 2.32%
Required return 3.32%
Overage risk premium 1.00%
Rent review period 5
Purchase costs 6.50%
Void Period 0
Figure 2: Subject property 2: 65 High Street
CALCULATIONS
DCF/real
Implied growth over review -18.59%
9

Implied growth per annum -4.03%
Inflation risk free yield 7.66%
Arbitrage
Implied growth over review -23.46%
Implied growth per annum -5.21%
Inflation risk free yield 7.94%
CONVENTIONAL EY VALUATION vertically sliced
Term:
Rent passing
£110,00
0
YP 1.6 @ 6.80% 1.4693
Capital value £161,619
Reversion:
ERV
£120,00
0
YP perp @ 6.80% 14.7059
Projected value £1,764,706
PV 1.6 @ 6.80% 0.9001
Capital value
£1,588,39
4
VALUATION (ignoring PCs)
1643204.93
3
£1,750,01
3
Initial yield 6.29%
Reversionary yield 6.86%
DCF VALUATION
Term:
Rent passing £110,000
YP 1.6 @ 3.32% 1.5336
Capital value £168,695
Reversion:
Projected ERV (ERV * (1+implied 1.6 £112,355
10

g)^
YP perp @ 6.80% 14.7059
Projected value
£1,652,27
3
PV 1.6 @ 3.32% 0.9491
Capital value £1,568,147
VALUATION £1,736,842
REAL VALUATION
Term:
Rent passing £110,000
YP 1.6 @ 3.32% 1.5336
Capital value £168,695
Reversion:
Projected 'real' ERV £120,000
YP perp @ 6.80% 14.7059
Projected value £1,764,706
PV 1.6 @ 7.66% 0.8886
Capital value £1,568,147
VALUATION £1,736,842
ARBITRAGE VALUATION
Term:
Rent passing £110,000
YP 1.6 @ 2.32% 1.5531
Capital value £170,836
Reversion:
ERV £120,000
YP perp @ 6.80% 14.7059
Projected value
£1,764,70
6
PV 1.6 @ 7.94% 0.8849
Capital value £1,561,611
11

VALUATION £1,732,447
EY Horizontally sliced
Bottom Slice Rent £110,000
YP perp @ 6.80% 14.7059
Capital value £1,617,647
Top Slice
ERV -
Rent £10,000
YP Perp @ 6.80% 14.7059
PV 1.6 @ 6.80% 0.9001
Capital value £132,366
VALUATIO
N £1,750,013
REVERSE LAYER/HARDCORE
(Core and Top Slice)
Bottom Slice ERV £120,000
YP perp @ 6.80% 14.7059
Capital value £1,764,706
Top Slice Rent - ERV (£10,000)
YP 1.6 @ 4.32% 1.5146
Capital value (£15,146)
£1,749,560
TR VALUATION
Term:
Rent passing £110,000
YP 1.6 @ 5.80% 1.4872
Capital value £163,595
Reversion:
ERV £120,000
YP perp @ 6.80% 14.7059
Projected value £1,764,706
12

PV 1.6 @ 6.80% 0.9001
Capital value £1,588,394
VALUATION £1,751,990
1645060.76
LAYER/HARDCORE
Bottom Slice Rent £110,000
YP perp @ 6.80% 14.7059
Capital value £1,617,647
Top Slice
ERV -
Rent £10,000
YP Perp @ 8.800% 11.3636
PV 1.6 @ 8.800% 0.8738
Capital value £99,291
VALUATIO
N £1,716,938
EY Quarterly in Advance
Bottom Slice Rent £110,000
YP perp @ 6.80% 15.3257
Capital value £1,685,832
Top Slice
ERV -
Rent £10,000
YP Perp @ 6.80% 15.3257
PV 1.6 @ 6.80% 0.9001
Capital value £137,945
VALUATIO
N £1,823,777
SUMMARY
Valuation after PC Initial Yld Reversionary Yld
Conventional £1,643,205 6.29% 6.86%
13

DCF £1,630,838 6.33% 6.91%
Real £1,630,838 6.33% 6.91%
Arbitrage £1,626,711 6.35% 6.93%
Layer/hard-core £1,643,205 6.29% 6.86%
Reverse layer £1,642,779 6.29% 6.86%
EY q in a £1,712,467 6.03% 6.58%
Interpretation:
This particular table which is showing the summary of valuation according to all the
methods which are been included within rent value of 65 high street property. The initial and
reversionary yield in all these methods is different so due to this valuation after purchase cost is
also different as in all these methods. While the highest is in EY that is £1,712,467 with the
lowest initial yield of 6.03% and the lowest valuation after PC is with arbitrage which is
£1,626,711 with the highest initial yield of 6.35%.
(ii) Details of transactions on other properties
Comparable A: 76 High Street
Apart from the above stated subject properties there are also some comparable one which
are located in nearby these both high street of 72 and 65. This particular 76 high street is an open
market letting store with the width of 6.1 meter and depth of 24.38 meter (Dickson, Jennings and
Koop, 2016). There is also some included clause for this building like that it of lease for 10 years
with 5 years upwards for the rent reviews. The rent till this time is £145000 for only retail use
with about 12 months’ rent free period and landlord will be giving his own contribution for
fitting and repair activities for about £75000. The review of rent for this property will be before 3
months before that of 72 high street.
Analysis & Valuation
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparable) 10
Year Reviews (Pattern of
Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
********
Implied Growth Rate
14

Formula
(1+g)^t = YP perp @
k - YP t yrs @ r 23.529412 -
6.864
081
---------------------
------------- =
-------------------------
---------------
YP perp @ k *
PV t yrs @ r 23.529412 *
0.485
1939
Where:
Rental Growth Rate = g%
p.a. = 16.665331 /
11.41
6328
Review Pattern = t years
Cap rate/ARY = k%
(1+
g)^ 10 =
1.459
7803
Target Rate = r% g =
3.855
3207
%
p.a.
Valuation
*********
Current Lease
Current Rent Paid £ 75000 p.a.
No. of Years
Unexpired 5
(Prior to Reversion to
CRV)
Current Rental Value
£
14500
0 Based on 10
Year
Reviews
TERM RENT 75000
YP Years 5 @ 7.50 4.0459
-----
Value of Term 303,441
-------
REVERSION TO
CRV 145000
Amt of £1 Yrs 5 @
3.855
3 1.2082
-------
175191
Years Purchase in
Perp @ 4.25 23.5294
PV Years 5 @ 7.50 0.6966
-------
Value of Reversion 2,871,313
-------
15

VALUATION
Term plus
Reversion 3,174,754
Less PCs 3,006,396
Interpretation:
From the above tables it is concluded that 10 years will be its review period target rate
will be 3.85% p.a. so the valuation for this property will be 3,174,754.
Comparable B: 73 High Street
The rent for this property will be £115000 with only open retail use which is having
width and depth of 5.79 and 22.86 meter the year of review is 20 years that was agreed by
surveyors.
Analysis & Valuation
*******************************
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparable) 20
Year Reviews
(Pattern of Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
********
Implied Growth Rate
Formula
(1+g)^t = YP perp @
k - YP t yrs @ r 23.529412 -
10.19
4491
---------------------
------------- =
-------------------------
---------------
YP perp @ k *
PV t yrs @ r 23.529412 *
0.235
4131
Where:
Rental Growth Rate = g%
p.a. = 13.33492 /
5.539
1329
Review Pattern = t years
Cap rate/ARY = k% (1+
g)^
20 = 2.407
4021
Target Rate = r% g =
4.490
6503
%
p.a.
Valuation
*********
16

Current Lease
Current Rent Paid £ 75000 p.a.
No. of Years
Unexpired 3
(Prior to Reversion to
CRV)
Current Rental Value
£
11500
0 Based on 20
Year
Reviews
TERM RENT 75000
YP Years 3 @ 7.50 2.6005
-----
Value of Term 195,039
-------
REVERSION TO
CRV 115000
Amt of £1 Yrs 3 @
4.490
7 1.1409
-------
131199
Years Purchase in
Perp @ 4.25 23.5294
PV Years 3 @ 7.50 0.8050
-------
Value of Reversion 2,484,939
-------
VALUATION
Term plus
Reversion 2,679,979
Less PCs 2,537,859
Interpretation:
From the above tables it is concluded that 20 years will be its review period target rate
will be 4.49% p.a. so the valuation for this property will be 2,679,979.
Comparable C: 64 High Street
Analysis & Valuation
*******************************
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparable) 15 Year Reviews (Pattern of Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
17

********
Implied Growth Rate
Formula
(1+g)^t = YP perp @
k - YP t yrs @ r 23.529412 -
8.827
1197
---------------------
------------- =
-------------------------
---------------
YP perp @ k *
PV t yrs @ r 23.529412 *
0.337
966
Where:
Rental Growth Rate = g%
p.a. = 14.702292 /
7.952
1416
Review Pattern = t years
Cap rate/ARY = k%
(1+
g)^ 15 =
1.848
8469
Target Rate = r% g =
4.182
1692
%
p.a.
Valuation
*********
Current Lease
Current Rent Paid £
1219
3 p.a.
No. of Years
Unexpired 3
(Prior to Reversion to
CRV)
Current Rental Value
£
7500
0 Based on 15
Year
Reviews
TERM RENT 12193
YP Years 3 @ 7.50 2.6005
-----
Value of Term 31,708
-------
REVERSION TO
CRV 75000
Amt of £1 Yrs 3 @
4.182
2 1.1308
-------
84809
Years Purchase in
Perp @ 4.25 23.5294
PV Years 3 @ 7.50 0.8050
-------
Value of Reversion 1,606,302
18

-------
VALUATION
Term plus
Reversion 1,638,010
Less PCs 1,551,146
Interpretation:
From the above tables it is concluded that 15 years will be its review period target rate
will be 4.18% p.a. so the valuation for this property will be 1,638,010.
Comparable D: 90 High Street
Analysis & Valuation
*******************************
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparables) 10 Year Reviews (Pattern of Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
********
Implied Growth Rate
Formula
(1+g)^t = YP perp @ k
- YP t yrs @ r 23.52 - 6.86
-----------------------
----------- =
---------------------------
-------------
YP perp @ k * PV
t yrs @ r 23.52 * 0.48
Where:
Rental Growth Rate = g%
p.a. = 16.66 / 11.41
Review Pattern = t years
Cap rate/ARY = k%
(1+
g)^ 10 = 1.45
Target Rate = r% g =
3.85 %
p.a.
Valuation
19

*********
Current Lease
Current Rent Paid £
7500
0 p.a.
No. of Years
Unexpired 5
(Prior to Reversion to
CRV)
Current Rental Value
£
1200
00 Based on
1
0
Year
Reviews
TERM RENT 75000
YP Years 5 @ 7.50 4.0459
-----
Value of Term 303,441
-------
REVERSION TO
CRV 120000
Amt of £1 Yrs 5 @
3.855
3 1.2082
-------
144986
Years Purchase in
Perp @ 4.25 23.5294
PV Years 5 @ 7.50 0.6966
-------
Value of Reversion 2,376,259
-------
VALUATION
Term plus
Reversion 2,679,700
Less PCs 2,537,595
Interpretation:
Ascertaining the valuation of 90 high street which demonstrates that there has been 10
years of reviews has been selected as per having adequate determination of the operational needs
and wants (Ibragimov and Müller, 2016). The rack rented capital has been based on the rate of
4.25%, assumed target rate has been determined as 7.5% and the purchaser’s costs has been
administered at 5.6%. However, as per analysing the outcomes based on such information there
has been target rate per annum has been measured as 3.85%. Moreover, as per considering the
valuation of property which determines that it will cost around £2537595 as per term plus
reversion.
Comparable E: 92 High Street
20

Analysis & Valuation
*******************************
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparable) 10
Year Reviews
(Pattern of Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
********
Implied Growth Rate
Formula
(1+g)^t = YP perp @
k - YP t yrs @ r 23.5294 -
6.86
408
---------------------
------------- =
-------------------------
---------------
YP perp @ k *
PV t yrs @ r 23.5294 *
0.48
519
Where:
Rental Growth Rate = g%
p.a. = 16.6653 /
11.4
163
Review Pattern = t years
Cap rate/ARY = k%
(1+
g)^ 10 =
1.45
978
Target Rate = r% g =
3.85
532
%
p.a.
Valuation
*********
Current Lease
Current Rent
Paid £ 75000 p.a.
No. of Years
Unexpired
5 (Prior to
Reversion to
CRV)
Current Rental
Value £ 110000 Based on 10
Year
Reviews
TERM RENT 75000
YP Years 5 @ 7.50 4.0459
21

-----
Value of Term 303,441
-------
REVERSION
TO CRV 110000
Amt of £1 Yrs 5 @ 3.8553 1.2082
-------
132904
Years Purchase
in Perp @ 4.25 23.5294
PV Years 5 @ 7.50 0.6966
-------
Value of
Reversion 2,178,237
-------
VALUATION
Term plus
Reversion 2,481,679
Less PCs 2,350,074
Interpretation: Determining the valuation and analysis of 92 high street on the basis of
various terms. It includes the year of rent reviews are approximately 10 years. Current rent has
been paid by owner as £75000, no of period which is unexperienced are 5 years and the current
rental value of the property is around £1100000. However, as per analysing the target rate which
has been expected by the professionals is around 3.85% per annum. On the other side as per
considering the valuation of the property on which analysing the outcomes such as reversion to
CRV will be around £110000. The valuation of the property on the basis of term plus reversion is
£2481679.
Comparable F: 55 High Street
Analysis & Valuation
*******************************
Rack Rented Cap rate 4.25 % (k)
(Assessed from Comparable) 7 Year Reviews (Pattern of
Comps)
Assumed Target Rate 7.5 % (r)
Purchaser's Costs 5.6 %
Analysis
22

********
Implied Growth Rate
Formula
(1+g)^t = YP perp @
k - YP t yrs @ r 23.5294 -
5.29
66
---------------------
------------- =
-------------------------
---------------
YP perp @ k *
PV t yrs @ r 23.5294 *
0.60
275
Where:
Rental Growth Rate = g%
p.a. = 18.2328 /
14.1
825
Review Pattern = t years
Cap rate/ARY = k%
(1+
g)^ 7 =
1.28
559
Target Rate = r% g =
3.65
398
%
p.a.
Valuation
*********
Current Lease
Current Rent
Paid £ 70000 p.a.
No. of Years
Unexpired 5
(Prior to
Reversion to
CRV)
Current Rental
Value £ 1100000 Based on 7
Year
Reviews
TERM RENT 70000
YP Years 5 @ 7.50 4.0459
-----
Value of Term 283,212
-------
REVERSION
TO CRV 1100000
Amt of £1 Yrs 5 @ 3.6540 1.1965
-------
1316202
Years Purchase
in Perp @ 4.25 23.5294
PV Years 5 @ 7.50 0.6966
23

-------
Value of
Reversion 21,572,044
-------
VALUATION
Term plus
Reversion 21,855,256
Less PCs 20,696,265
Interpretation: As per analysing the outcomes of 55 high street which determines that
there will be 7 years of reviews, the number of period which were unexperienced are 5 years,
current rent has been paid here are £70000 and the current rental value is approximately
£110000. Moreover, considering the outcome which defines the valuation of property as per
target rate of return is around 3.65%. On the other side, in relation with analysing the outcomes
which demonstrate the valuation of property in that particular location which defines actual
outcomes based on the property. The reversion to CRV is around £1100000 on which the rate of
this property has been determined as 1.1965. Similarly, as per considering the value of reversion
which is £21,572,044 with considering the PV year’s rate 0.69. Moreover, the overall valuation
of this property can be analysed as £21,855,256.
(iii) Details of rating scheme
As per ascertaining the land or property valuation in a particular location which requires,
appropriate governance by legal authorities in UK such as valuation office agency as well as
local council (Scott and Storper, 2015). This agency acts for administrating or calculating the
business rates bill. Moreover, it will be helpful to the owner in terms of having information
relevant with the valuation of their owned property. Considering the rating valuation of
properties which are under the governance and framework of VOA has been analysed as per
below listed tables.
24

Interpretation: By considering the operational activities and framework of the business
which is required to have analysis on each property and the areas which have been covered by
25

them. The high street numbers 52-54, 56-62 etc. has been ranked on the basis of its values in the
location. Zone which have been considered in the valuation of the streets in the particular areas.
Number 52-54 as 1150, 56-62 as overall, 64 as 1300, 66 as 1350, 68 as 1400, 70 as 1450, 72 as
1500, 74-96 as 1500, 51 as overall, 53 as 1150, 55 as 1200, 57 as 1250, 59-61 as 1325, 63 as
1400, 65 as 1500, 67 as 1500, 67 as 1500, 69-73 as 1500, 75-79 as overall, 81-85 as 1500 and 87
as 1500. Therefore, in relation with their outcomes there have been valuation of other properties
which are listed in the location.
Capital valuation:
Interpretation: As per considering the operational requirements and management of
various operations which is required to have suitable control on each tasks and operations held in
the valuing the property in the locations (Tori and Onaran, 2018). However, as per considering
the Ground zone A which covers the area of 41.95meter square rates as £1500 m^2 and total
value of property as £62925. Retail Zone B covers the area of 36.36Meter square rates as
£750m^2 and total amount is around £27270. Similarly, as per analysing the Retail Zone C
which covers the area of 45.46, rated at £675 and valued at £17048. Moreover, in accordance
with Remaining Retail Zone which has been based on area of 65.56meter square, rates at
£187.50 and valued at £12293.
26

However, as per analysing the value of other properties in the locations on which first
floor has been covered in the Retail area currently operating in 87.60meter square of property has
been rated on £150m^2 and valued at £13140. Similarly, as per considering the value of stock
room which covers the area of 52.15meter square has been rated at £100meter square and valued
at £5215. However, as per analysing the outcomes on which it can be said that’s the total area
which has been operated for business and under shop premises which is 336.53meter square. The
total values of the properties which have been used for the commercial purpose are £137891 on
which the adopted rateable value has been determined as £137750. Moreover, considering the
methods of VOA in terms of valuation of the properties which will be adequate in terms of
analysing the current rates and value of land which has been used for residential or commercial
purpose (Gemmell, Kneller and Sanz, 2016).
CONCLUSION
On the basis of above report it can be concluded that there have been administration of
adequate analysis and determination of proper costs and valuation of the properties. UK has been
suffering huge influences in the housing property rates and valuation in each operation.
Implicating the framework of various legal authorities such as VOA etc. has the impacts in
demonstrating exact value of the property. There has been estimation and measurement made on
the properties situated in various high street such as 72 and 65 with implicating tool like DCF.
Moreover, there had been consideration of properties which had been used for comparison such
as 76, 73, 72, 64, 55, 90 and 92 High streets.
27

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