Valuation of a commercial property in Neutral Bay for SMSF and Stamp Duty Purposes

Post date: Apr 24, 2015 3:20:27 AM

Commercial Property Valuation requires an in-depth market research. Often there is no definite sales and lease evidence indicating a market yield. We review the current lease terms but we also compare a benchmark data to see if it is considered appropriate in the current market as to vacancy rate, outgoings, annual gross net, and annual net rent per meter square. Some important things in relation to a commercial property are highlighted as below:

  • An important parameter to determine the value of commercial property is dollar value per building floor area per meter square, in conjunction with how much income is produced from renting out the commercial property. This will eventually show the 'market yield' of the property.
  • For instance, while property price may higher than other commercial property in terms of its location and its position of the building but rent won't be higher than others due to current economic conditions.
  • We double check the market data utilizing 'Capitalization Approach' and 'Direct Comparison Approach' to arrive at an open market value of the commercial property.
  • Other important parameters to determine the value of a commercial property are its location and position, age and condition of the building, quality of improvements, any street signage exposures, availability on-site parking and Council zoning, etc.
  • Many people who own a commercial property often require valuations for their Self Managed Super Funds (SMSF) but also Stamp Duty purposes.