Answer ALL questions

Question 1:  give a market value opinion on recently refurbished vacant office premises in Nottingham City Centre. The floor area of the office premises measures 2,500sq ft NIA. Comparable evidence gathered from market sources is summarised in Table 1 below:

Table 1: List of Comparables

Property Transaction Date Use Rent (£) p.a./ selling price (£) Specification Location Size (Sq ft)
A Let 10 months ago Office 25,000 Grade A Office space Nottingham city centre 2000
B Sold 2 months ago Mixed use 450,000 Refurbished office space Nottingham city centre 2500
C Let 12 months ago Mixed use 15,000 Grade A office space Mansfield 1900
D Let a month ago Office 29,000 Refurbished office space Sneinton Nottingham 2520
E Let 3 month ago Office 25,000 Refurbished office space Nottingham city centre 2000

Calculate rent per sq. ft (or sale per sq. ft) for all the comparables as appropriate.
Give opinion on best comparable and state your reasons.
Estimate the market rent of the subject property.
Briefly explain three (3) disadvantages of comparative method of valuation.
Briefly explain three (3) advantages of comparative method of valuation.

Question 2:

A subject property is let on the following terms as summarised in Table 2.

Table 2: Summary of Terms

Tenant Lease Rent Review Passing Rent (per annum) Market Rent (per annum) ARY
Sainsbury’s Plc 15-year FRI lease in June 2019 5 Yearly upward only £100,000 £111,500 6%

Calculate the market value of the subject property using the Term and Reversion approach.

Highlight and briefly explain five (5) factors that can influence yield, that is, rate of return of property investment.