Business Property - Top Factors Affecting the Value of Your Sale
What's it werth?
Find out what's really going on in the Commercial Property Space with Jason Werth, our MD and Commercial Property expert.
Read Jason's views on:
- The current Commercial Property market
- Future property values
- Market trends and reports
- Sector & Geographical analysis
If you want to stay ahead of the curve in Commercial Property, CLICK HERE and visit Jason's blog NOW!!
Is your business property up for sale? It's pretty much a given that you will be seeking to realise the maximum value from your sale.
But it is also quite likely that you are unsure as to which factors will have the biggest influence on the price you get. The answers to questions such as these lie with a good understanding of what a professional commercial property valuer looks at when he is making his assessment of the business properties for sale.
The term 'business property' covers a whole host of different types of commercial property. It could be single shops, larger retail outlets, or even retail parks that you have on the market. Or you could be selling small office units under single tenure or larger office blocks with multiple occupancy. Industrial or manufacturing units also come under the broad umbrella of 'business property' that commercial valuers deal with.
So what is the valuation process? Well, the first thing that a commercial property valuer will do is make a comprehensive assessment of the business property for sale. The size, number of units, facilities, the potential business purpose of the property, an alternative use to which the business property could be used for etc will all be essential features that will materially affect the valuation.
Then the valuer will need to look at what the tenant income is for the current owner of the business property, and what the fixed operating costs of the premises are. The valuation will make use of this net income, in other word, the balance of the tenancy rent income against the costs of ownership.
Next, the valuer will need to consider what the expected local market yields are for the size, type and business use of the business property. In other words what return a buyer would want to see if they decided to buy the property (recent transactions in the vicinity will need to be taken into account when assessing a yield). This gives the valuer a good initial idea of what the property is worth now, in comparison to similar business properties in the locale. But to make a more accurate estimate, the valuation should reflect the future intangibles of owning those premises.
This will include things such as the quality of the tenants, which is to say their business viability and credit worthiness, as well as the average occupancy and default rates for similar business properties and tenants, and how these may change in the future. But things such as occupancy, and credit worthiness, can depend on how the local, and national, economy is expected to perform. All of these may, therefore, affect the future cash flows available to new purchasers, and so ultimately, the value of the sale.
It can be seen that the task of the valuer of your business property is not simple - it requires a firm grasp of the details of the property, and its tenants, a good feel for the local commercial property market, as well as the local economy, and how all of these connect back to the bigger economic picture.
So you may see that the factors that will affect the money you receive for your business property sale are not just the specifics of you premise, and your current tenants, but include many larger economic forces acting at levels far removed from the immediate location and market of the business property.
SellMyCommercialPropery are experts in assessing the value of properties throughout the UK and armed with their knowledge of the property market, and vast resources available to them, are able to make you an offer for your property without the cost of you having to go to commercial valuers.
- Commercial Mortgage Drought-Find Easy Options for Fast Refinance
- Business Lending - How Property Assets Can Unlock Cash Finance
- Commercial Estate Agents-Are They Best Placed To Close Your Sale?
- Business Refinancing - How to Raise Capital in the Credit Crunch
- Commercial Listings Light on Buyers? Exploring the Alternatives
- Commercial Property Consultants Predict Dip in Capital Values
- Commercial Property Search - Is It the Best Place to Find Buyers?
Sign up for our free newsletter and get the latest news and views on the Commercial Property Market straight into your inbox