Strategic Property Market Analysis Report: Finance, Semester 1

This report provides a comprehensive strategic property market analysis of a commercial property located at 171, Burwood Road Burwood, NSW 2134, Australia. It evaluates the property's financial performance, considering various factors such as land and titles, location, site description, town planning, statutory valuation, and improvements. The report utilizes comparison and cost methods for valuation, analyzes market trends, assesses risks, and includes an insurance assessment. It also provides a detailed valuation summary, income statement, and decision analysis, offering valuable insights for investors. The report also delves into the property's location within the Burwood Council area, discussing site services, town planning initiatives, and environmental considerations. The analysis includes key assumptions, defined variables, and economic values to determine the property's valuation and potential returns.

Strategic Property Market Analysis 1
Strategic Property Market Analysis
By [Name]
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Professor’s Name
Name of the university
Name of the city
Valuation Summary

Strategic Property Market Analysis 2
The report has been prepared in manner that can be helpful to the investor particularly in in
regard to making a decision on investment undertaking. 171, Burwood Road Burwood, NSW
2134, property in Australia has been used as a case study for the analysis. The risk and
profitability of the business have been evaluated. Several other aspects such as land titles,
town planning, site description and services have also been investigated. The most
appropriate valuation approach for this kind of property was the comparison and cost
methods. The comparison method has been used for an assessment against properties whose
sales are well known. The property chosen is for freehold and can be occupied on date of
valuation. It has been prepared on the basis of direct comparison and cost method for
secondary check.
Table of Contents

Strategic Property Market Analysis 3
Executive Summary.........................................................................................................2
Introduction......................................................................................................................3
Land and titles..................................................................................................................3
Location.............................................................................................................................4
Site description and services...........................................................................................4
Town Planning..................................................................................................................4
Statutory valuation and charges.....................................................................................5
Improvements...................................................................................................................5
Age/Repair........................................................................................................................5
Environmental matters....................................................................................................5
Comments on the property..............................................................................................6
Basis of valuation..............................................................................................................6
Tenancy details.................................................................................................................6
Valuation rational or methodology.................................................................................7
Market review or summary.............................................................................................7
Risk analysis.....................................................................................................................7
Government Policies........................................................................................................8
Insurance assessment.......................................................................................................9
Data collection..................................................................................................................9
Valuation/analysis..........................................................................................................10
Qualifications and disclaimers......................................................................................10

Strategic Property Market Analysis 4
Conclusion.......................................................................................................................10
Reference list...................................................................................................................12

Strategic Property Market Analysis 5
Introduction
The economic performance of commercial properties is most times influenced by a number
of factors. Most of these factors are usually intersecting and they include both economic,
social, locational as well as property-specific influences. These might occur at both micro and
macro levels. The focus of this report is to evaluate the financial performance of the
commercial property located at 171, Burwood Road Burwood, NSW 2134, a property in
Australia. It has been chosen for analysis and help investors in terms of their decision making
(Hornigold 2017). The overall returns on an office as well as investments retail property are
applicable for the purpose of assessment of the potential and general performance of the
commercial property market in light of the economic factors of supply and demand as well as
the related variables. The report analyses the market interactions relating to demand and
supply as well as the general market performance. In addition, this report has focused on the
analysis of a number of factors including the risk, the lands and titles, the location, the site
and the associated services, tenancy agreements among other factors. All these factors are
deemed essential in terms of guiding the investor’s investment decision making process.
Land and titles
It is noted that the property has not been registered as crown land. This is particularly in
regard to 171, Burwood Road Burwood, NSW 2134. For that matter, there is no need for any
extra payments to be made in form of land tax by the investor. It is a prerequisite that a
determination that is consistent with the “Native Title Act” must obtained in the due course
of ALC making plans to sell the land. This is paramount for the purpose of ensuring that there
is no native land tittle within the area. It is noted that there was a record of about forty three
non-claimant determinations found by the ALCs. The indication is that there wasn’t an
existence of any native title within the location (Channon and Jalland 2016). For that matter,
this particular property is easy to choose for investment because there are no hindrances
associated with the native land titles which would have reduced on the profits generated from
the investment (Altman 2018.)

Strategic Property Market Analysis 6
Location
The property is located within the Burwood Council area which is within the inner western
conurbations of Sydney. In the north, it is bordered by the Councils of Canada Bay while
Canterbury is in the southern border. In the western, it is bordered by Strathfield while
Ashfield borders it in the eastern part. Essentially, Burwood is both a commercial and
residential area.
Site description and services
The site has a regular shape. It is serviced with the normal services including gas, water
electricity as well as having sewage within an elevated position. The site also benefits the
council program of providing garbage services to the business and residential properties. It
also takes very seriously the provision of safe as well as amenable aquatic services aimed at
the complementing the recreational needs of the community (Matthewson, 2012).
Town Planning
The property chosen for evaluation is on Burnwood Road Burwood, NSW 2134. The town
council has been involved in the management and development of a number of projects with
the intention of attracting as many investors as possible. The major is to ensure that there is a
prevailing healthy environment, appropriate jobs as well as affordable housing facilities. The
town is being planned in manner that focuses on long term investment and hence the need for
the reassurances concerning the infrastructure funding. The planning is also directed towards
strategies such as value capture funding.
Statutory valuation and charges
The report contains a full valuation of the property and it’s prepared as per the International
statutory standards (Taylor 2014). These included charges associated with the inspection of
the property as well as a comprehensive market survey to determine the value. Some of these
charges include the mortgage registration charge of $150, the transfer fee $300 and stamp
duty.
Improvements
There are some proposed improvements and these are done in respect of the freehold
property. Improvements will include replacement of kitchen furniture and doors as well
compound redesign. Improvements shall further be focused on the on the central heating as
well as water supply pipelines (Larry, 2016). Additionally, the electrical cables as well as
drainage improvements are fundamental parts of the land and must be included within the
property under valuation. There will also be improvements focused on the concrete paths to
the residence.

Strategic Property Market Analysis 7
Age/Repair
It is understood that the property needs simple kitchen and window repairs and maintenance
particularly in terms of updating the fittings including majorly the bathrooms as well as
redecoration.
Environmental matters
The Burwood council is strongly focused on the reduction of the incidences of environmental
pollution. This is done through the council area where most of the efforts are aimed at the
improvement of the environmental landscapes. There are programs focused on the
maintenance of the regulatory and educative functions aimed at the minimisation of pollution
(Elizabeth, 2015). More particularly, focus is put on dealing with the issue of waste disposal
to ensure that wastes are appropriately disposed of and maintain a healthy environment.
Comments on the property
The site and property generally do have a number of attractions in form of landmarks that are
of significant importance to the people. These do attract tourists. In the same manner, the
place is located in quite a secure environment and with added protection provided by the
government, the investor would be able to guarantee maxim safety. It is also important to
note that this kind of property is under government protection and hence there is little to no
chance for it to be rezoned (Throsby 2016). The property’s prospective value would increase
over a given time period in the event that there is appropriate property maintenance.
Additionally, the uniqueness of the property is also major appeal to the investors in the
process of decision making.
Basis of valuation
The market value of the property is being assessed on the basis of the practice statements as
well as the relevant notes for guidance as per the international valuation standards Committee
(IVSC). These include the projected amount for which the asset should be exchanged on the
date of valuation between the willing buyer and the willing seller within an arm’s length deal.
This should particularly be after sufficient marketing and in cases where each of the parties
have acted prudently, competently and without any coercion. The determination of the market
rent is based on the projected amount for which the property would have to be leased
(Altman, 2018).
Tenancy details
In accordance with the freehold property tenancy guidelines, the usual fixtures to be
undertaken by the landlord will include the facility’s utilities such as the central heating as
well as water supply pipelines (Gurran and Phibbs 2015). These also include the electrical
cables, drainage systems as well as other improvements and repairs to be undertaken on the
site. All these are included in the asset under evaluation. The property valuation is hardly

Strategic Property Market Analysis 8
inclusive of any mortgage registered on the property and does not have an effect on the
conclusion of the final market value (Enever etal.2014).
Valuation rational or methodology
The most appropriate valuation approach for this kind of property is the comparison and cost
methods. The comparison method will include an assessment against properties whose sales
are well known (Channon and Jalland, 2016). The comparison would be made after making
due modifications for the variations within the location, the condition, the dwelling size,
quality of accommodation presentation, appearance and other site factors. For that matter,
through the assessment of the current value of the market by direct comparison, the market
report was produced (Sydney, 2017).
Market review or summary
Having experienced close to six years of strong house price increments, the housing market
for Australia is currently experiencing a sharp cooling off. This is majorly because of the
introduction of measures for market-cooling such as the stricter restrictions for lending
(Kirsty, 2016).There is also an imposition of higher taxes concerning any foreign investment
within the housing market. Prices within Australia’s eight big cities experienced a fall of
7.7% over the course of the first quarter of 2019.
Risk analysis
Risk associated with the
property
Comments
Land and title No issues known
Locality Handy with most of the properties having excellent
views
Improvements Mixed newer and original conditions/presentations
Planning resource consent issues No expected issues
Market risk
Market segment Entry level and under $750,000 desired
Reduction in value after 2 years Prices initially flat although now rising sharply
Local economy Steady population
Market volatility Listings are generally low with activity falling
Insurance assessment
Insurance is determined for all the period of forecasting. The cost amounts to 0.02% from the
total costs of development on the basis of the assumption that there are hard construction
costs, project management costs, the infrastructural as well as contingencies (Uren, 2011).

Strategic Property Market Analysis 9
Data collection
The project embarked on a ruthless footpath management undertaking which involved the
integration of modern data collection techniques. These were based on the principals of asset
and risk management (Hull 2014). The evaluation included a record for every single footpath
hazard within the council area as has been personally rated and recorded light of an
established hierarchy of risks. The data attained is subsequently sorted within the database to
establish its rating.
Valuation/analysis
Estate
Valua
tion
and
analys
is
ASSU
MPTI
ONS
Yea
rly
Gross
Rent
in the
first
year
182,
400.
00
Coll
ection
and
Vacan
cy
factor 0.05
Ope
ration
expen
se for
first
year
55,5
40.0
0
Yea
rly
perce
ntage
chang
e from
rent 0.03
Yea
rly
perce
0.03

Strategic Property Market Analysis 10
ntage
chang
e in
expen
ses
Rati
on of
Loan
to
Value 0.75
Yea
rly
Intere
st rate 0.06
Loa
n
terms
(years
)
25.0
0
Perc
entage
of
price
in
impro
vemen
ts 0.85
CPI
yearly
Increa
se 0.03
Afte
r tax
discou
nt
rate 0.08
Ass
umed
Cap
rate at
point
of sale 0.08
cost
of
transa
ction
as
perce
ntage
of sale
0.09

Strategic Property Market Analysis 11
price
Cap
Rate
at the
purch
ase
point 0.09
THE
DEFI
NED
VARI
ABLE
The
recove
ry
period
(years
) 39%
Rate
of
Incom
e tax
0.15
0
The
rate
for
capita
l
Gains
0.05
0
Valua
tion of
the
prope
rty
$
1,29
9,55
8.49
9
THE
ECO
NOMI
C
VALU
ES
The
Loan
Amou
nt
$
974,
668.
874
The
equity
neede
$
324,
889.

Strategic Property Market Analysis 12
d 625
the
mortg
age
Loan
consta
nt
$
0.07
8
THE
DECI
SION
ALYS
IS
year 0 1 2 3 4 5 6 7 8 9 10 11
Real
Cash
Flow
(32
4,8
89.
6)
444,
137.
4
600
,86
0.1
580
,38
6.5
566
,15
2.4
552
,32
8.3
538
,90
2.1
525
,86
1.9
513
,19
6.5
500
,89
4.8
204
,83
8.2 0.0
PV
(32
4,8
89.
6)
411,
238.
3
515
,14
0.7
460
,72
9.5
416
,13
8.9
375
,90
5.4
339
,59
9.7
306
,83
5.4
277
,26
4.1
250
,57
2.1
94,
879
.7 0.0
NP
V
$
3,12
3,41
4.26
Afte
r Tax
Real
IRR
154.
25%
INCO
ME
STAT
EME
NT
year 0 1 2 3 4 5 6 7 8 9 10 11
Yea
rly
Gross
Rental
Reven
ue
182,
400.
0
187
,87
2.0
193
,50
8.2
199
,31
3.4
205
,29
2.8
211
,45
1.6
217
,79
5.1
224
,32
9.0
231
,05
8.9
237
,99
0.6
245
,13
0.3
Coll
ection
Losses
and
vacan
cy
-
9,12
0.0
-
9,3
93.
6
-
9,6
75.
4
-
9,9
65.
7
-
10,
264
.6
-
10,
572
.6
-
10,
889
.8
-
11,
216
.4
-
11,
552
.9
-
11,
899
.5
-
12,
256
.5
The 173, 178 183 189 195 200 206 213 219 226 232