Commercial Property Valuation – London


Commercial Property Valuation – when, why and how?


Retaining an independent surveyor to carry out a commercial property valuation when you are considering an investment in commercial real estate, or when you decide to sell it can have enormous benefits. It can help you make the right decision and secure a safe deal, meaning that you save time and money while procedures are smooth and easy. A commercial property – such as a shop, office or industrial unit are asset classes that are incoming producing primarily owned and asset managed by investors to provide a return based upon their risk appetite. The numerous purposes of a commercial real estate valuation can include loan security, sales, development, taxation, property insurance, or charity act.

 

Commercial Property Valuation - London
Commercial Property Valuation - London

Why Harding Chartered Surveyors?

At Harding Chartered Surveyors, we aim to be direct, open, and honest. As members of the Royal Institution of Chartered Surveyors (RICS), we must abide by strict ethical standards.  We benchmark ourselves against the client feedback we receive. We deal with complex matters but interpret all the jargon for you to give you a common-sense opinion.

Our surveyors are always more than happy to spend time discussing matters with you.

Our RICS Chartered Surveyors comply with stringent guidelines and use 60 years of combined experience to provide accurate commercial property valuations in London.

Contact our professional and RICS registered valuers to arrange the valuations that will save you time and money, and make the whole procedure smooth and easy.

Commercial Property Valuation - London
John Simmons
15:53 29 Oct 20
Commercial Property Valuation - London
Martina Glaser
17:56 28 Oct 20
Scott completed a survey for me on a flat purchase and both he and Kate were great - very quick to respond, knowledgeable, thorough and happy to address any additional questions I had. Would definitely recommend and use them again.
Commercial Property Valuation - London
Bene Walters
10:47 05 Oct 20
I requested Harding to provide a valuation for a lease extension. Albert Wellington was in charge of my property and he was extremely professional and helpful in addressing all my concerns. I would recommend him and the company with no hesitation.
Commercial Property Valuation - London
Claire Brown
14:17 19 Aug 20
A very efficient, timely and thorough service for us, as we go through the house buying process. I'd definitely use them again.
Commercial Property Valuation - London
Nicholas R.
10:05 23 Jul 20
Very satisfied with service. Report was delivered promptly and provided the information we needed.
Commercial Property Valuation - London
Richard Denison Gay
14:49 02 Jun 20
Excellent service; professional, helpful, communicative and courteous as well as relatively quick. I would highly recommend.
Commercial Property Valuation - London
Marianna Ciampa
14:25 30 Jan 20
Very efficient and professional. I had my survey few months ago before buying my house and I am still following the advice from the survey to fix and repair what needed. I dealt with Scott Ingham and I think he worked very accurately and checked everything very carefully. Highly recommended.
Commercial Property Valuation - London
Amel Ahmed
16:15 13 Nov 19
Needed a valuation for a property purchase and can honestly say the service was 1st class from start to finish. Queries were dealt with promptly and followed up via telephone to make sure I was happy with the responses.The team are extremely knowledgeable.Thank you Kate, Albert, David and the rest of the team I will definitely use the company again.
Commercial Property Valuation - London
Millie Jones
16:07 30 Oct 19
Harding's were great - very responsive, gave a very clear and detailed report and were happy to run through their comments with me over the phone.
Commercial Property Valuation - London
Emma Goldschmidt
16:21 01 Oct 19
Brilliant thorough service!
Commercial Property Valuation - London
Jennifer Smith
11:12 30 Aug 19
Commercial Property Valuation - London
Harry Coaker
09:46 22 Aug 19
Dealt with James Brook, very efficient and professional, James had the report sent out to us within 24hrs. would highly recommend.
Commercial Property Valuation - London
Karen Royal
21:33 14 Aug 19
Commercial Property Valuation - London
David Good
10:34 20 Jul 19
Harding Chartered Surveyors are a very professional business who handled a challenging task for us with ease. I highly recommend them and will be using their services again.
Commercial Property Valuation - London
Karen Ng
22:30 01 Jul 19
Very efficient service and very detailed report. We are very satisfied.
Commercial Property Valuation - London
Lily Kwong
10:38 24 Jun 19
Really quick turn around and professional service.
Commercial Property Valuation - London
Sue Hodgkins
16:42 20 Jun 19
Commercial Property Valuation - London
Neill Ghosh
14:22 11 Jun 19
Have used for years and always been very happy. Competitive on service and always good on deadlines and quality. Recommended.
Commercial Property Valuation - London
tom binks
17:56 09 Apr 19
Commercial Property Valuation - London
Kevin Loughlin
20:27 28 Mar 19
The surveyor turned up on time as planned to survey the roof, both inside and out, then was happy to discuss it all with us afterwards. Bit tricky in high winds. Report arrived 2 days later, just what we needed. Professional and thorough. Recommended.
Commercial Property Valuation - London
Jon Brennan
09:44 01 Mar 19
Quick, responsive and very thorough. Would definitely recommend Hardings to others, and will come back to them the next time I need a survey completed.
Commercial Property Valuation - London
Abi and Andy La Fontaine
20:57 20 Feb 19
Quick, efficient and excellent service. Came as a recommendation from a friend and we’d happily recommend too.
Commercial Property Valuation - London
Bradley Roth
01:56 16 Feb 19
Commercial Property Valuation - London
Giulio Pepe
16:25 16 Dec 18
Thorough and professional surveyors. Very happy with their service. Highly recommended.
Commercial Property Valuation - London
Margaret Rowley
16:09 03 Dec 18
Commercial Property Valuation - London
Simon Wilson
15:54 10 Nov 18
Good, thorough, and promptly scheduled homebuyer survey in Fulham. The surveyor called me and explained everything clearly.
Commercial Property Valuation - London
Daniel Vernazza
10:41 29 Apr 18
I highly recommend David. Very good technical knowledge. He was always available for our questions, which included a detailed call on the same day as the survey. The written survey report was clear, detailed and included pictures and estimates of the cost of repairs.
Commercial Property Valuation - London
James Palairet
11:16 09 Jan 18
David gave us a fantastic service and has been a huge help during our property purchase process. We have had 2 surveys carried out, both of which were arranged very promptly. Thorough and extremely useful telephone calls and full written reports were received shortly afterwards. David's reports and advice have been invaluable to us.
Commercial Property Valuation - London
Sarah Dixon
14:13 08 Jan 18
I have worked with David and his team as a buying agent for many years now. The service they offer is an excellent one, timely with a commonsensical approach. I would recommend them to anyone.
Commercial Property Valuation - London
William Sharples
08:57 05 Oct 17
James provided a very professional and thorough service, highly recommended.
Commercial Property Valuation - London
Elif Erdine
14:30 04 Oct 17
Very experienced firm and friendly staff. Highly recommended.
Commercial Property Valuation - London

Different Commercial Property Valuation Methods


There are different commercial property valuation methods that can be implemented to determine the current market value of a commercial real estate. The three main approaches are the cost approach, the income approach, and the sales comparison approach. These valuation methods are different to the method an estate agent would use to calculate the market value of a real estate. To make sure that you are provided with an accurate figure, the surveyor you have retained has to opt for the right valuation method.

The cost approach valuation method

The value of a residential property is determined largely by its condition, but the value of a commercial property is determined by several other factors such as location, its potential to generate a rental income, floor plan and amenities. If your investment property is a new building, valuation might be simpler as it generally involves the construction cost and the market value of the land. In case of an existing property, however, appraisal becomes more complicated. Construction costs and market land value are factored in, but reduced by physical deterioration, structural and functional obsolescence, or by any external factors from the surrounding area such as extreme traffic, pollution, or anything else that would affect the operating income of the property. This appraisal method also factors in the useful economic life of the building, and the time that elapsed since the property was placed into service. Generally, it is difficult to use this method on anything other than a new structure.

Sales comparison approach

This method uses comparable sales data from similar properties that have been sold recently, and are similar in age, location, and overall property quality. So, data such as differences in sale date, geographic location, building age, square footage, and proximity to other landmarks are used to calculate an appropriate value. This approach works well when you have had a lot of transaction activity in your market within the last 12 months. But the less transaction activities you have in your market, the less useful this method is.

The income approach

If the cost approach and the sales comparison approach aren’t sufficient to come up with a valuation, a third method that is used in commercial property valuation is the income approach valuation method. Within the income method there are three main sub-methods. The first is the gross rent multiplier approach. This involves dividing sales prices of comparable commercial real estates by the gross rent that those properties are going to generate on an annual basis. This is going to give you a number that you can apply to the gross rents of your specific commercial properties. Often this isn’t all that helpful since most properties are going to have different expense ratios.

The second income approach method that is used is the direct capitalisation approach. In this method, instead of taking the gross operating income, you are taking the net operating income of the property into account. This is just applying a market-appropriate cap rate to a net operating income value, and taking that net operating income and dividing that by the market cap rate. The way valuers will come up with a market cap rate is they take comparable sale data, calculate what the cap rate was on those sales, and then apply that data directly to the subject commercial property. So if several inferior properties sold for a 6 per cent cap rate and the subject property that they are analysing is in a better location and slightly newer, they may apply a lower yield to the subject property.

The third income approach method is the discounted cash flow method. This includes forecasting net cash flows over a significant period of time – usually somewhere around ten years – assessing what the assumption will be for the sale price of the real estate at the end of the hold period. This is followed by taking the net cash flows, revenue, expenses, capital expenses, and projected sales proceeds when you assume to seal the deal, and then applying a discount rate to discount those cash flows to produce a valuation for the property.


When do you need a Commercial Property Valuation?


  • In case of considering a property investment, since you need to know the current market value of the commercial real estate you choose to invest in.
  • Lenders need loan security, so when your business is looking to secure funding from a bank, you will need a commercial property valuation so that the lender knows that your real estate is worth enough to cover the outstanding loan as a collateral.
  • When your lease expires, and your landlord is trying to make a claim for repairs, and you don’t want them to claim for repairs for more than the property value has decreased.
  • When you are taking out a mortgage, buying a leasehold or a share in a commercial property and you need to pay Stamp Duty.
  • If you decide to sell your commercial real estate, the Inland Revenue will require a formal written valuation to calculate any Capital Gains Tax due.
  • When you are entering into a loan agreement and the lender wants to make sure that their loan is secured because your real estate is worth enough to cover the outstanding loan as a collateral.

Commercial Property Valuation - London