When purchasing or selling a commercial property, the valuation submitted by your surveyor is a key moment in the process – and it can make your experience vary between the straightforward and the stressful. Taking time to consider the reasons for, and the process of, your valuation can help you to steer the course of the process.
The meaning of market value as laid out by International Valuation Standards is “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.” Consider, though, that a valuation does not need to be just part of a sales or purchase process. A commercial property may need to be valued at the end of a lease, as part of a secured loan process or for taxation or company account purposes.
With the diversity of property types that can sit within a portfolio, from office to leisure and retail to industrial, different aspects of a building will affect its value depending on that building’s function. For a valuation to be clear and accurate, a comprehensive background awareness of specific habits and trends within a defined property type is essential.
Benefits of location do not follow a standard rule; different locations are favourable for different property types. Offices, for example, benefit greatly from being located close to public transport links, whereas warehouses and industrial units benefit from easy access to the motorway network. The value of retail properly can vary considerably even though two properties may be in close proximity.
The Royal Institute of Chartered Surveyors have, this month, updated their global standards in valuation. The purpose of this is clear when they say: “Transparency, consistency and the avoidance of conflicts of interest have never been more important. Nor has technical expertise and practical ability ever been more in demand, including the experience and insight necessary to interpret and review market dynamics and trends, and – in relation to real estate assets – to recognise the growing relevance of sustainability factors as a market influence.” It is clear that after the global financial crises of 2007 and 2008, looking to the future has never been more key, and sustainability factors are becoming very real considerations in future-proofing.
When valuation advice can influence strategic decision making within an organisation, the process can have far-reaching consequences beyond simply property selling, buying or letting. These nuances should be duly considered during the process of valuation. It is therefore key to entrust this process to an organisation that has experience in all areas of commercial property, allowing the owner to reap the benefits.
Wadham & Isherwood offer a comprehensive valuation service providing clients with up to date valuation advice on all types of commercial property.
Our Surveyors offer a full Valuation service for all types of commercial property and are all Certified as RICS Valuers. Existing clients include high street banks, property companies, local authorities and private individuals.
Our core Valuation business includes:
• Loan security – Banks / Pension funds
• Company accounts
• Matrimonial disputes
• Local Authority asset valuations