Comercial property value

DELLBOY_2

Hi all

can someone point me in the right direction or give me some information please .

I own a shop with a flat above there is another flat which was sold on a long leashold 20 years ago .

There has been permission granted to seperate the shop into 2 units and one unit has A5 use (takeaway food)
i know have the chance to rent on 5 year leases both ground floor units for £1000 and £ 800 a month and the flat is rented at £550 a month and the takeaway guys will do the £7000 of work needed to grant the licence
We have tried to sell the lot freehold without much success ,so i wondered what the value of this unit would be to an invester or what and how would a bank value it as security as it now produces (or could )£28200 /a year

JQ.

It would be valued by applying a yield to the income. To calculate what yield to apply the following factors would have to be taken into account :

• Location
• Quality of building
• Covenant strength of tenants
• Occupational demand
• Supply of competing properties
• Future rental growth prospects
• Sales of comparable investment properties
• Lettings of competing properties
• Lease terms and rent review provisions

Costs such as future Capital Expenditure, future voids, rates liabilities, and acquisition costs (Stamp duty, Legal fees, surveyors fees and VAT) would also be deducted.

It's impossible to say what it's worth without investigating all of the above but a ballpark could be around £180,000 to £220,000 (12.5 to 15% yield). However, it could be worth alot more or worth alot less depending on the above factors.

DELLBOY_2

JQ. wrote: »

It would be valued by applying a yield to the income. To calculate what yield to apply the following factors would have to be taken into account :

• Location built up area 1000+ houses in a 1 mile radius
• Quality of building good as half is only 3 years old
• Covenant strength of tenants will go to 10 year lease
• Occupational demand no a 5 units within 2.5 miles
• Supply of competing properties no comercial units in the area
• Future rental growth prospects 3 year reveiws accepted by both comercials and flat is under rated bt £100
• Sales of comparable investment properties not within 5 miles
• Lettings of competing properties no a5 available
• Lease terms and rent review provisions

Costs such as future Capital Expenditure, future voids, rates liabilities, and acquisition costs (Stamp duty, Legal fees, surveyors fees and VAT) would also be deducted.

It's impossible to say what it's worth without investigating all of the above but a ballpark could be around £180,000 to £220,000 (12.5 to 15% yield). However, it could be worth alot more or worth alot less depending on the above factors.

maybe this will help