Level 2 - Bridgend

Question 1

Tell me about the property?

Answer 1

Semi-detached, 1960s unit with 2000s extension
37% site cover
Steel portal frame, brick work and metal cladding
asbestos and pitched metal sheet roof
translucence light
4 roller shutters
8.5m eaves
Superior specification in new unit - LEDs, better quality floor, better quality
60,000 sq ft

Question 2

How does a SWOT analysis assist with decision making?

Answer 2

clear tabular features about the property
Simple, clear analysis for high level information to client

Question 3

What was the Strengths and Weaknesses of this proeprty?

Answer 3

Strength - location, lack of supply in the market, new modern unit
Weakness - older unit needs work, little room for expansion

Question 4

What was the Opportunities and Threats?

Answer 4

Opportunity - ease of sub-dividing due to configuration
Threats - nearby industrial estate

Question 5

What features did you look for on inspection?

Answer 5

Repair - roof, major structural defects (cracking, deleterious materials)
Asbestos - if contained, condition, where
Environmental - invasive species, tanks, flooding, power lines

Question 6

What is a deleterious material? Example?

Answer 6

Can degrade with age causing structural problems
High alumina cement - prone to crystalisaiton which weakens concrete

Question 7

How is the property attractive in the market?

Answer 7

Benefits from modern extension
LED lighting
Good office content
Roller shutters and winches
Good location
Use for multiple purposes
Size in line with market

Question 8

Why does attractiveness in market affect loan security?

Answer 8

In case the bank has to repossess it knows how it would present for occupier or investor

Question 9

Why is it attractive for investors?

Answer 9

Number of asset management angles
sub-division
Improve ESG upgrades
Upgrade original unit

Question 10

How is it suitable for sub-division?

Answer 10

configuration would allow for partitioning into reasonable size units
Roller shutters located that would provide multiple access points
Yard space would allow for multiple points of access via shared entrance
Good office content but would only be for one subdivided unit

Question 11

Why would a multi-let property have a greater income?

Answer 11

Quantum - higher rent on smaller space
Greater receipts - split of service charge
Risks of covenant

Question 12

What was the yield?

Answer 12

7.5% Equivalent yield

Question 13

What was the MR?

Answer 13

£4.75

Question 14

What was MV?

Answer 14

£3,000,000

Question 15

Did you Value to VP?

Answer 15

Yes under special assumptionW

Question 16

What was VP Value?

Answer 16

£3,000,000
Owner occupied, therefore not income producing so same at MV

Question 17

What was your approach?

Answer 17

Comparable method to find per sq ft basis and MR figure
Confirmed with investment at 7.5% with MR assumption of
5 year term, 6 months void and 6 months rent free

Question 18

Tell me about your valuation in Bridgend

Answer 18

Point 1 – I produced a SWOT analysis to include in my valuation report for my client
Point 2 – I noted the strengths and opportunities included its specification would be attractive in the market, and had the potential to be split to provide a multi-tenanted unit which may yield a greater income.
Point 3 – I noted the weaknesses and threats such as the older section of the unit would not be deemed as attractive and would need upgrades. I also considered the neighbouring industrial estate which had a good occupier mix and may prove competitive