CASE STUDY Q'S

Question 1

Red Book VPS

What did you adhere to when writing your report?

Answer 1

VPS 3 becomes VPS 6 (Valuation reports),

Question 3

What part of the red book do you consider when writing your COIL?

Answer 3

VPS 1 Terms of engagement (scope of work)

VPS stands for Valuation Professional Standards, which guide the valuation process.

Question 4

What did your COIL include?

Answer 4

• Identification and status of the responsible valuer
• Identification of the client
• Identification of any other intended users
• The asset being valued
• Valuation Currency
• Purpose
• Bases of value
• Date
• Limitations
• Sources of information relied upon for the valuation
• Format of the report

These elements ensure clarity and comprehensiveness in the valuation process.

Question 5

For pharmacies, is it better to be in an affluent or deprived area?

Answer 5

Affluent area for business; deprived area for social benefit

Affluent areas have lower closure rates, while deprived areas address greater health needs.

Question 6

On the Location Map of the property, what does the PW abbreviation stand for?

Answer 6

Place of Worship

This indicates the proximity of religious facilities to the property.

Question 7

Are there any disadvantages to the roof construction of the property?

Answer 7

• Poor water drainage
• Leaks
• Pooling water
• Increased maintenance needs
• Vulnerability to weather damage
• Shorter lifespans than pitched roofs

These factors can affect the overall integrity and longevity of the property.

Question 8

The property had a 9 year residual term; how does this compare against the comparable evidence?

Answer 8

All comparables had more than 10 year residual terms

Comparables were standard commercial leases, not subject to onerous terms.

Question 9

Did any of the comparables have any onerous terms that would impact on value?

Answer 9

No, they were all standard commercial leases

This indicates a favorable comparison for valuation purposes.

Question 10

Why do you have internal sign off protocols?

Answer 10

• Ensure accuracy and reliability
• Consistency and standards double checking
• Holistic view across the Company of value
• Reduce liability

These protocols help maintain quality and accountability in the valuation process.

Question 11

Did you exclude any circulation spaces in your calculation of NIA?

Answer 11

Yes, circulation spaces are generally excluded

Circulation spaces include corridors, lobbies, and stairwells.

Question 12

Were you privy to the loan details? How did you determine suitability?

Answer 12

Sense checked using an inbuilt excel mechanism

This mechanism assesses the loan against the loan period and required payback levels.

Question 13

What did you include in your valuation report?

Answer 13

• Identification and status of the responsible valuer
• Identification of the client and any other intended users
• Purpose of the valuation
• Identification of the asset(s) or liability(ies) valued
• Basis(es) of value adopted
• Valuation date
• Extent of investigation
• Nature and source(s) of the information relied upon
• Assumptions and special assumptions
• Restrictions on use, distribution, and publication of the report
• Confirmation of adherence to IVS and/or RICS Red Book Global Standards
• Valuation approach and reasoning
• Amount of the valuation or valuations

These components ensure compliance with professional standards and provide a comprehensive overview of the valuation.