Aspect Valuations Sydney

Commercial Property Valuation

The accurate valuation of property allows you to make the right investment decision – whether to hold, sell or reposition. Timing is critical to realising capital appreciation.

Independent property valuation advice can ensure that you purchase at the right price. It is often at the time of purchase that profits are made. Due to the time taken to relocate it is essential that anyone considering a purchase understand not only what is happening now, but what is likely to happen in the near future.

Our advantage lies in our expertise and understanding of the market evidence from which the market rental and capitalisation rates are derived.

Purpose

We provide valuations for all purposes (excluding second mortgage purposes).  Some of the more common purposes fall under the following categories:

  • Acquisitions and disposals
  • Alternative use and highest and best use analysis
  • Asset valuations to meet ASIC & AASB guidelines
  • Compulsory acquisition and resumption
  • Feasibility studies
  • Funds management advice and portfolio analysis
  • Income and outgoings projections and analysis
  • Insurance valuations
  • Listed property trust valuations and revaluations
  • Litigation support
  • Marketing and development strategies
  • Merger and acquisition due diligence
  • Mortgage valuations
  • Property syndicate valuations and revaluations
  • Prospectus valuations
  • Rating and taxing objections
  • Receivership and liquidation support/advice
  • Relocation advice, strategies and consultancy
  • Rental assessments and determinations
  • Sensitivity analysis
  • Stamp duty valuations
  • Strategic property planning

Non-residential property types

Our services can be utilised in the assessment of the following non-residential property types:

  • Retail shopping centres and shops
  • Metropolitan and CBD commercial office buildings
  • Industrial, office/warehouses and factories
  • Business parks
  • Accommodation Hotels and Resorts
  • Rural properties
  • Special use/purpose properties; and

Report

A qualified Property Valuer will provide a written report which includes:

  • Independent assessment of the current market value of the property
  • Analysis of lease/s – compared with the market
  • Market rental assessment
  • Photos, details and analysis of recent sales and lease transactions as well as current and proposed offerings when suitable
  • Relevant market conditions
  • Past sales and rental history of the property
  • Positive and negative features of the property from an independent perspective
  • Suggested future improvements to add value (where relevant)
  • Location information
  • Title information
  • Replacement cost valuation for insurance purposes (not for individual strata lots)

Factors

Every property is unique. Commercial property values are influenced by a greater range of internal and external factors than residential. The main factors to consider are (not an exhaustive list):

  • Floor Plate – Functionality, size
  • Availability of services
  • Prestige of location and building
  • Building quality and aesthetics
  • Views
  • Exposure
  • Ancillary income sources eg. Signage – current and future potential
  • Managing agents – letting up periods in relation to market
  • Parking
  • Tenant quality
  • Tenant mix (of most importance in retail and mixed use developments)
  • Lease terms (period of duration) and conditions in relation to market
  • Overall marketability of property considering market conditions across Australia, Sydney and locally
  • Photos, details and analysis of past transactions, current offerings and proposed offerings if suitable

After the valuation has been completed the Valuer will call you to discuss the various issues and answer any questions you may have.

Rent to be Capitalised

Income is usually the basis for determining an investment property’s value. Once the net market rental of a property is determined it is capitalised at a rate of return that the market would be likely to pay for a property of its type (based on comparable transactions).

Commercial Pre-Sale Property Valuations

Agents provide free appraisals to clients in order to secure properties to sell. Quite often they are unrealistically high and based purely on a need for business.

Valuers on the other hand do not have a vested interest in the sale of property. This may not be the case for firms that act as agents also. A valuation costs around 1/20th of a sales commission. Should you trust your next pre-sale valuation to a firm using valuations to get sales?

If you are intending to sell property it is important to get a valuation to ensure you know what it is worth rather than relying on the opinions of agents (working for themselves as opposed to you). While there are agents who practice with integrity others set unrealistically high prices to secure work. Auction is quite often the method suggested currently despite low clearance rates. Agents will often pressure vendors to accept prices far lower than anticipated. If an agent has suggested Auction as the sale method, ensure they explain why and demonstrate recent auction results for similar properties in the area.

Commercial Pre-Purchase Property Valuation Advice

Purchasing a commercial property for occupation or investment is rarely simple. However, with adequate knowledge of a local market, it is possible to consider all available stock in a timely manner. The benefits of certain features of individual properties are often forgotten by purchasers. It is vital to have systems in place to consider properties if you want to maximise the chance of finding what you want in the desired timeframe. Without assistance it is easy to spend over twelve months looking for the right property as opportunities are missed and market conditions change (rendering your older research irrelevant to a certain extent).

Ensure you do not pay too much for a property you would like to buy. A pre-purchase valuation is a relatively small cost in the purchase process that may save you money or highlight information previously unknown to you. You may find out something that turns you off a property or something that you are willing to pay more for.

Commercial Mortgage Security Property Valuations

Our reports are accepted by many lenders. Our reports are styled to suit our clients’ particular requirements and always aim to ensure our clients are fully informed as to the current position of the security property.

When purchasing or refinancing, valuations are often required for multiple purposes. We can provide reports for multiple purposes.

Commercial Family Court/Divorce Settlement Property Valuations

We provide commercial valuations for Family Court purposes in settlement cases.

Commercial Property Stamp Duty Valuations

The figure used for tax calculation is the highest of the actual sale price and the valuation. This may be conducted in conjunction with a Capital Gains Tax Valuation.

Commercial Property Capital Gains Tax Valuations

Current

The current Market Value of a property can be used as a base for Capital Gains Tax that will be incurred in the future.

Retrospective

Retrospective Capital Gains Tax Valuations may be required to establish a base for determining capital gains tax.

Commercial Compulsory Acquisition Valuations

When acting under instruction from a client our fee is fully reimbursed by the acquiring authority.

A wider range of factors must be considered in commercial acquisitions due to the potential impact on existing business/es.

When property is compulsorily acquired the price offered is largely determined by a property’s market value as determined by a registered valuer working for the relevant department. The market value of the property is added to the various amounts of compensation payable under the various Heads of Compensation.

We are not entitled to act as advocates, we guarantee you that we will be objective and not just put a figure on that ‘keeps everyone happy’. If we believe that your property has been undervalued we will take the time to make it clear to the acquiring authority and yourself why. We will provide comprehensive analysis of all comparable transactions and offerings in order to fully understand the range of prices achievable in the current marketplace. In many cases we find the original offer to be fair, if that is the case our report will provide peace of mind.

It is vital that a valuer carrying out work of this type be familiar with the relevant legislation and case law. Acquiring authorities pay market value for a property and assess compensation under the other heads of compensation.

Financial Reporting Commercial Property Valuations

Amendments made in 1998 to International Accounting Standard 16 Property, Plant and Equipment, have led to the concept of Market Value for the Existing Use being replaced by the concept of Fair Value in financial reporting standards in Australia. The Fair Value of all land, buildings and other improvements held as either freehold or leasehold by companies must be determined for accounting purposes.

We have the resources and experience to value land, buildings and other improvements (eg. golf course improvements, pontoons) at Fair Value. The classes of assets valued may include land, buildings and other improvements.

Commercial Property Insurance Replacement Cost

We can calculate the reinstatement and replacement insurance value of any property whether existing or proposed. For existing properties this may include the calculation of depreciation.

Commercial Property Litigation Support

We may be able to assist you if you have lost money as a result of a valuation and wish to take legal action against the firm in question. Our valuers carry out work of this nature regularly. Please contact us to arrange an appointment. After we have seen the report we are often able to tell you if we can be of assistance before having inspected the property.

Commercial Property Rating and Taxing (Unimproved Land Value)

Unimproved Value is the basis of land valuations for Rating and Taxing Purposes. Due to the nature of the methodology employed for mass valuations it is common for valuations to be significantly out of line with the market.

Commercial Property Development Feasibility Studies

We have the knowledge and experience to provide property valuations and advice with regard to any commercial development proposal.

Commercial Property Rental Valuations / Assessments

We provide rental valuations for all types of urban property for all purposes. Rental Valuations are of little use if they are carried out poorly with insufficient evidence and easily disputed in court.

A Valuer must consider differences between comparable properties as well as the differences between the leases and make adjustments accordingly. Due to the large number of subjective adjustments required to complete a rental valuation there is a large potential for dispute between the lessor, lessee and valuer. A good rental valuation is independent and clearly explained. There must be no confusion as to how the rent was calculated.

Analysis of current and potential rental income form an integral part of a Commercial Valuation. However, a rental valuation is required in isolation in certain situations, including the following:

New Lease

Owners

We can provide owners with a rental market valuation before a property is advertised for lease. This can help to set a reasonable asking rent and avoid a lengthy marketing period.

Intending Lessees

We can provide rental valuations for intending lessees when a new lease is to be entered into for a particular property. We analyse recent transactions as the main basis for the valuation. However current offerings are also considered. Not only could a rental valuation lead to significant occupancy cost savings over the lease term, it may also identify other suitable properties available. This saves clients from investigating all of the available properties of interest.

Commercial Property Market Rental Reviews

An existing lease may incorporate a market rent review clause. In such circumstances we can offer expert advice to ensure a fair rent is calculated with due and proper regard for current market conditions according to the terms of the lease.

Paying no more than market value is critical to the longevity of any lease.

Variations to Lease

We can also be of service when a lease needs to be varied.

Rental Determinations

It must be remembered that this is the point at which it is possible to obtain a fair market rental determination and avoid any further conflict.

Because the determination is binding on the Lessor and Lessee it must be accurate and formed with a sound basis or it could lead to litigation. Even when a party is successful in their legal pursuits, avoiding court and maintaining the lease would usually be preferable.