Project Valuation Report for a Luxurious Waterfront Residential Apartment in Geelong Region

This report is a project valuation report for a luxurious waterfront residential apartment in Geelong Region. It includes details on the property's market value, location, features, risks, and advantages. The valuation was conducted using the direct market value comparison method and the International Valuations Standard Committee definitions. The property is a private ownership and has an area of 6249 sq.m. The market value is $1,150,000 as of summer 2018.

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PROJECT EVALUATION REPORT
By
Course
Professor
University
City, State
Date

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Table of Contents
Executive Summary..........................................................................................................................3
Letter of Transmittal........................................................................................................................4
Letter to client..................................................................................................................................6
Introduction.....................................................................................................................................8
Reason for Valuation.......................................................................................................................9
Client Assumptions..........................................................................................................................9
Site details......................................................................................................................................11
Description of the Property...........................................................................................................13
Risks Involved................................................................................................................................14
Advantages of the Project..............................................................................................................15
Methodology..................................................................................................................................15
Definition of Value.........................................................................................................................15
Definition of Interest to Valued.....................................................................................................17
Valuation Date...............................................................................................................................17
Conclusion.....................................................................................................................................17
Biography......................................................................................................................................19

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Executive Summary
Property Address 102/64-66 Eastern Beach Road, Geelong, Vic 3220
Property Type Luxurious Waterfront Residential Apartment
Instruction Mr. & Mrs. James and Pamela Wright, through their real estate agent
McGrath Real Estate Company
Type of Ownership Private
Date of Valuation 3rd of August, 2018
Features Area:6249 sq.m.
Location attributes Walking distance from the CBD and recreational centers
Second street from the sparkling waters of the bay
Environmental aspects Free from environmental risks
Surrounded by trees and a garden
Adjustments The site has been improved with concrete and precast concrete
features. It also has quality features and fixtures, as well as the
electrical appliances fitted within the house
Interested Values simple fee of 5%of the valuation value
Market Value $1,150,000.

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Letter of Transmittal
Macy Banks
File No: 712453
Client #00354
RE: Valuation of 102/64-66 Eastern Beach Road, Geelong, Vic 3220
Dear Mr. Brown,
Please note the receipt of this letter as a confirmation for the completion of the building valuation
and appraisals of the above named apartment in the Geelong Region, Victoria. The appraisal was
completed using the direct market value comparison method which considers property sales of
the nearby property while the uniform standards of Professional Appraisal Practice were strictly
followed in the writing of this report. Other aspects that played a key role in settling on the figure
proposed include the location of the property, and its zoning, the accessibility of the property
form different transport system methods. Landmarks around the area and factors that increase the
value of the property were also considered in this valuation exercise.
My opinion of the property is that it can be valued for:
$1,150,000
as at summer of 2018. This opinion is limited by the conditions of certifications.
Regards,

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Ms. Macy Banks
Signature

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Letter to client
25th August, 2018
Macy Banks
File No: 712453
Client #00354
RE: Valuation of 102/64-66 Eastern Beach Road, Geelong, Vic 3220
Dear Mr. & Mrs. Wright,
This is to notify that the valuation of your property for purposes of establishing the market value
of the property has been successfully completed. The appraisal was conducted using the direct
market value comparison method which considers property sales of the nearby property while
the uniform standards of Professional Appraisal Practice were strictly followed in the writing of
the report. Other aspects that played a key role in settling on the figure proposed include the
location of the property, and its zoning, the accessibility of the property form different transport
system methods. Landmarks around the area and factors that increase the value of the property
were also considered in this valuation exercise.
My opinion of the property is that it can be valued for:
$1,150,000
as at summer of 2018.

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It has been a great pleasure working for you in this project of valuing your property in the
Geelong region. N case of any problem, please do not hesitate to reach me on my phone or
email, so I see how I can be of additional service to you.
Regards,
Ms. Macy Banks
Signature

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Project Evaluation Report For An Apartment in the Geelong Region
Introduction
During this exercise, Highland Valuers Company has been instructed by Mr. & Mrs. James and
Pamela Wright, through McGrath Real Estate Company to conduct a property appraisal exercise.
The appraisal was conducted using the direct market value comparison method which considers
property sales of the nearby property while the uniform standards of Professional Appraisal
Practice were strictly followed in the writing of the report. The valuation exercise was also
conducted according to the definitions of the International Valuations Standard Committee
which have been adopted by the Australian Property Institute (Kunis, 2015, p. 12). These
definitions include;
 The Highest and best use which indicates the utilization of an asset in order to optimize
the potential of the property to a financially feasible and legally permissible option. This
ensures that the property is used in the most probable and highest use from the date it is
valued.
 The rent of the property in the market which is the estimated figure for which real
property should be leased at from the date it has been valued. The two parties should
have agreed at on the price after marketing in a transaction that happens without any of
the parties being compelled to participate.
 The market values on the other hand refer to the price at which a property should be
exchanged for following a valuation where the parties agree and act prudently. This
value consists of the prices of the fixtures of the building including the equipment and
plant within it, as well as the fittings

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Other aspects that played a key role in settling on the figure proposed include the location of the
property, and its zoning, the accessibility of the property form different transport system
methods. Landmarks around the area and factors that increase the value of the property were also
considered in this valuation exercise. The passing yield which is the %price from the current
passing net income, such that no chance is allowed for the rent to grow in the future also
contributes to the value of the property. Another factor is the equivalent yield which is the annual
yield obtained from the current net income and any expected future changes to the net income
over time such that no chance is allowed for the rent to grow in the future . This thus implies that
the yield is the rate of return of a net income stream over given time in order to that reflects
current rents and costs and current levels of rental values (Morey, Shaw, and Rowe, 2011, p.
197). Finally, the market yield is also considered which refers to the percentage price from the
assessed market net income such that no chance is allowed for the rent to grow in the future thus
contributing to the value of the property.
Reason for Valuation
The goal of the appraisal was to give the company and the couple an opinion about the market
value of their property. The owners wanted to know this values so they could be able to account
for the value of the property, and incase a mortgagee was interested in the property, the couple
would be able to come up with a reasonable mortgage security deal (Andrews and Moore, 2017,
p.271).
Client Assumptions
 The report findings will be based on the evaluation of current market value and
consideration improvements.
 Any instances that may affect the market value that are not considered in this evaluation
ought to be clarified with the valuer whether or not they affect the project.

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 All the valuations have been done after the valuer has physically inspected the site and
identified the boundaries of the property.
 All the information provided in this appraisal report is confirmed with qualified
surveyors who have the mandate of giving the identification survey.
 Any doubts arising from the appraisal can be confirmed following the guidance of a
qualified surveyor who can advice if the valuation exercise is impacted.
 Should the report be found erroneous, the matter should be referred back to the valuation
company who shall review the valuation (Reed, 2015, p.9).
 The valuation exercise shall not include any soil or environmental impact assessments or
reports.
 The report also assumes that there are no environmental issues on the property that may
impact the value of the property either through surface or subsurface problems on the
property. It also does not consider hazardous or toxic wastes, risks associated with
building material on site, or even explosive material that may still have not exploded.
This is because any considerations of these factors may negatively affect the market
value of any property, or even its use. This will most definitely have a significant effect
on the value of property when considered during assessment. The occurrence of such
matters on the land are thus not accountable to the valuer, unless the value has confirmed
that the ordinance will not affect the property.
 The information utilize to conduct this appraisal has been obtained from the City Council
of Victoria and thus the valuer cannot be accountable for the inaccuracy of this
information.

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 The valuation considers the improvements made on the land currently, their compliance
to the regulations and laws of the rightful authorities as well as the approval of the use of
the building
 The valuation also ought to consider structural and service installations of the
improvements indicating the capital expenditure of the improvements (Cooper and
Henderson, 2017, p. 577)
Site details
The property is located close to two main facilities, namely the Friends of Geelong Botanic
Gardens and the Eastern Beach Recreation reserve. This means that the property can easily be
accessed using the Eastern Beach Road and the Hearne Parade which leads to the Geelong Play
Space and the Friends of Geelong Botanic Gardens (Georges and Clive, 2012, p.130).

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The property sits on an area of 6249 sq. m. with two storeys and surrounded by a serene beach.
The land has been improved since 1979 with precast concrete and concrete masonry luxury and
prestigious residential apartment. According to our valuation, the building provides A plus
quality luxury residence. The property can be accessed from Eastern Beach Road, Brougham
Street, and Alexandra Avenue, when coming from different directions of the city.

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Description of the Property
The property offers an exclusive and luxurious space of water front living as it is located on the
second street from the beach. The location is also one of Geelong’s most premium residential
locations, as it showcases views that face towards the north overlooking the sparkling waters of
the bay at Geelong. Since the building’s construction in 1979, the interiors of the building offer
a retro aura which is detailed with quality fittings and features. It is also fitted with stainless steel
appliances and footsteps that lead to a Porsche overlooking the Botanical gardens and the water
front of the Bay. From the property, one can walk to the CBD and the different sites within sight.
The building is also luxurious as it has an open plan that allows occupants to enjoy the breeze as
is related to the terrace. The terraces also have gardens that are facing the sun allowing them to
be more productive for gardening. The kitchen is fitted with bench tops, pantry and microwave,
stainless steel oven, dishwasher, electric cook-top. The master bedroom is a master en-suite has a
bed that has robes which flow into the terrace. The other bedrooms have a laundry an d a main
bathroom. The house also comes with a fitted air-con system, storage space, and a security
system, parking on and off the street.

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Risks Involved
Some of the risks involved in this process include;
 Asset Management Risks: the property might require to be professionally managed even
though the project is not management intensive.
 Investment Risk: If the property is able to enter the property market soon after valuation
and is purchased by a private developer such that the property’s value would increase
before the valuation period expires.
 Asset Risk: The land has been subject to contamination of any sort, or the title deed has
issues, and the use of the land for the use it is used for is not consistent with the highest
and best use of the property.
 Leasing and Cash Flow Risks: The passing yield of the land goes beyond the rental value
as this will make the values inconsistent industry benchmark (Li, 2017, p. 71).

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Advantages of the Project
The project is advantageous because it helps the owners and their real estate agent to identify the
market price of the property. This will aid them to understand their options with regard to the
sale of the property or even the mortgage security of the property if there was a need to look
for buyers or tenancy.
Methodology
The methodology used in valuing this property as has been earlier stated will be to directly
compare the market value of other property in the same class and locale as the one being valued.
The project will be reconciled with the capitalization of net income of the other properties. The
method will guarantee a value rate of the property to the other properties in the area. The value is
also computed using a given rate per square meter of the area occupied by the property. The
value of the land also tends to adopt the value that is derived from the other factors that affect the
value of property and the prices associated with other properties that are comparable in elegance
and capital of net income (Washington, Stevens, and Underwood, 2015, p.321). Applying a
capitalization rate that is guided by the prices of other properties in the market has a tendency of
affecting the capitalization of net income. This implies that the net annual market rent is used to
come up with the core investment value of the property which is the price of a fully leased
property given the current rates of rent in the market. This therefore marks the below the line
adjustment for the investment characteristics of the property (Russell and Wagner, 2017, p.227).
Definition of Value
This section looks into the different attributes that are considered very valuable to the property as
well as the market sales and exchanges that would have an impact on the price and value of the
property. Considering the comprehension of the market parameters at the date of the valuation
exercise the following valuation parameters contributed to the value opinion for this property.

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 Sales History: The property was built in 1979 and has been the residential home of the
owners and their family since then. As earlier explained, the couple simply want to know
the value of the property and understand the mortgaging security arrangements incase
they would find the option appealing for them. The property has offered a 5% fee of the
value of the land for the valuation exercise.
 The sales Evidence also counts as an important definition of value in this project: This
will help in identifying the market range of the property being valued (Collymore, 2013,
p. 161).

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Definition of Interest to Valued
The Interest to valued was the fee which was a simple subject to the value of the land. The fee
was set at 5% (Gregory, 2016, p.331)
Comparison Between the Project Value and the Value of the nearby Projects
1. 4176-3Eastern Beach Road, Geelong
Selling Price: $950,000
Date of sale: 1st September 2017
Comments:
The entire project sits on a total area of 5900sq. m. The property is also situated a good distance
from the sparkling waters of the bay. The site is extremely accessible to the nearby facilities and
also the city centre, although it is quite a distance from it that walking would be ambitious. The
property is also close to other amenities like the nearby kindergarten. It is also exposed to good
other social amenities due to its proximity to the city, where we find all the schools, shopping
markets, and even healthcare facilities. The site however faces a serious disadvantage of its
orientation with regard to the recently blowing winds. This can be easily fixed by installing wind
breaking facilities on the site.
Comparison:
This option presents a bigger property with older and less modern fittings and the fixtures
showing that it is a worse option than the property.

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2. 104 Corio Street, Geelong
Selling Price: $1,000,000
Date of sale: 17th December 2017
Comments:
The property sits on an area of about 4200 sq.m. which is way smaller than the area of the
property at hand . The property however sits in an environment that appears more modern
and elegant, making it the choice of many luxury apartment tenants and buyers. The area
is a serene and peaceful environment which makes it very suitable for residential spaces.
A number of social amenities like health care centres, supermarkets and schools.
Comparison:
The property sits on a small piece of land and has a wider forest cover that make it
susceptible to visits from small animals from the forest.
3. 24 Pevensey Street, Geelong
Selling Price: $1,050,000
Date of sale: 24th March 2018
Comments:
The property sits on an area of 6500sq.m. which is bigger than the size if the main
property. The site is however located very close to many commercial buildings. The
property is very well connected to the transport system that leads to the main amenities of
the area. While it is surrounded by many commercial facilities, the social amenities
required for residential purposes are located quite far from the property. It is however
situated next to the Silicon IT Company offices and the commercial park of Geelong.
Comparison:
However, the area has a high traffic of commercial vehicles, clients, and employees of
different companies that are situated in the locale making it a rather unsuitable place for
residential purposes.
4. 789 Stansworth Street, Geelong
Selling Price: $1,100,000
Date of sale: 1st June 2018
Comments:
The property has an area of about 6000 sq. m. although is located in an environment that
has not been fully explored as a residential area. For this reason, this property lacks social

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amenities that would make residential purposes easier. The transport system in the area
has also not been advanced and perfected s not many people go to this part of town as
often.
Comparison:
Due to the state of the property, the value of the property cannot be guaranteed as there
are no signs of budding settlements in the region.
Valuation Date
The Valuation Date was the 3rd of August, 2018.
Conclusion
The property that was being valued in this exercise is an existing luxurious waterfront apartment
overlooking the sparkling bay waters of the Geelong Beach. The property can be accessed with
through the Hearne Parade or the Eastern Beach Avenue. The valuation exercise was aimed at
determining the market value of the property for the owners, in order for them to be aware of the
potential property sale value. Since the property is already owned by the couple, there was really
no need to conduct a surveying exercise. The property sits on an area of 6249sq.m. The rate per
square meter of the property was found to be $184. 31due tothe expensive and luxurious space
that the property offers(Wright, Smith, and McIntire 2016, p. 224).
The definition of the market value highlights that the valuation has been conducted assuming no
special valuation exercises. The foregoing matters thus become the biggest factors of
consideration when conducting a valuations exercise. After all these considerations the value of
the property was found to be $1,150,000.

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Biography
Andrews, R. and Moore, K.., 2017. Design efficiency for non‐market valuation. Australian
journal of agricultural and resource economics, 52(3), pp.253-282.
Collymore, B.B., 2013. A meta-analytic review of contingent valuation and cultural resources.
Journal of cultural economics, 27(3-4), pp.159-176.
Cooper, S.K. and Henderson, B.L. (2017). The c ontingent valuation method. Regional studies,
31(6), pp.571-582.
Georges, P. and Clive, R. (2013). SystematicMethod For Property Valuation. London:
McGrawhill Inc.
Gregory, R. (2016). Interpreting measures of economic loss: evidence from contingent valuation
and experimental studies. Journal of Environmental Economics and Management, 13(4),
pp.325-337.
Kunis, J. (2015). The process of valuing natural resources: Following non-market valuation
Econometrics. New York : Taylor & Francis.
Li, V. (2017). Pricing what is priceless: a status report on non-market valuation of
environmental resources. Queensland : Bloomsbury Publishing.
Morey, E.R., Shaw, W.D., and Rowe, R.D. (2011). A discrete-choice model of recreational
participation, site choice, and activity valuation when complete trip data are not available.
Journal of Environmental Economics and Management, 20(2), pp.181-201.
Reed, R. (2015). The valuation of real estate. Victoria: Atlas Publications.
Russell, W.S., and Wagner, P.M. (2017). The benefits of contingent valuation using benefit
evaluation. Journal of environmental Economics and Management, 14(3), pp.226-247.
Washington, B.D., Stevens, B.X., and Underwood., A. (2015). An analysis of bias in the
valuation of properties. Environmental and Resource Economics, 30(3), pp.313-325.

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Wright, M., Smith, C., and McIntire, J. (2016). The empirics of wetland valuation: a
comprehensive summary and a meta-analysis of the literature. Environmental and Resource
Economics, 33(2), pp.223-250.