Law
Property 6: Logistics unit, 4 Orchard Way
This property has been let to a tenant at a current passing rent of £355,000 p.a. which was agreed when the lease commenced on 1 April 2020. The lease provides for five–year rent reviews from the date of commencement.
On the same industrial park, a comparable unit (8 Orchard Way) has just been let at
£285,000 and then sold for £4,750,000 inclusive of costs.
A further property on the same park (1 Orchard Way) comprising 8000 square metres IPMS2 (GIA) has just been let on similar lease terms as the subject at a rent of £440,000 p.a.
Tasks:
Your new client has requested an indication of value, for sale purposes, for each of the properties outlined above.
1. Your line manager would like you to provide an initial draft letter to your client setting out:
• the steps to be taken prior to providing these indications of value in the report the yare requesting.
• the advantages of continuing to invest in real estate over stocks, shares, ISAs,
pensions and cryptocurrencies
(15 marks)(approx.1000 words)
2. Assuming that all preliminary matters outlined in your letter have been satisfactorily resolved, provide a draft report setting out your opinions of value of each of the properties.
The valuations should include full annotations to explain your approach to the client. Your report should finish with clear recommendations on the next steps to be taken. (80 marks:
Property 1 Bistro Bandaras 10 marks, Property 2 80 High Street, Market Town 15 marks,
Property 3 Plot of Land for residential development 20 marks, Property 4: Tertiary industrial property on long lease 15 marks, Property 5: New office building, New Town 10 marks .Property 6: Logistics unit, 4 Orchard Way 5 marks, Property 5 Insurance valuation 5 marks)
(80 marks)(Approx. 2750 words)
3. The insurance is due for renewal on Property 5 so your client also requires an insurance valuation to be provided on an indemnity basis
(5 marks)
(Approx. 250 words)
