Author: Bill Kassaras, Associate Director Government Advisory
For valuation purposes, most property readily falls into asset categories, such as residential, retail, industrial, mixed-use and office property. However, many organisations – including governments at all levels – also need valuations of less common property types.
In my work providing valuations of commercial asset classes for governments at all levels, as well as businesses, I’ve enjoyed valuing a wide variety of assets ranging from ambulance stations, marinas, boarding houses, parklands, ports and air space, to bridges, roads, easements and telecommunication towers. These valuations have been used for accounting and financial reporting, acquisitions and disposals (including compulsory acquisitions), market rent, rental reviews and rental determinations, development valuations, statutory valuations and insurance purposes.
These recent case studies reflect the range of this type of specialist work and the approaches we take to provide robust valuations of uncommon assets.
Telecommunication infrastructure assets can be complex to value due to the number of leaseholders involved and the wide range of sites they occupy.
For example, we recently valued a telecommunication tower for rental purposes. The tower, a monopole, was situated on council land within a fenced off area within a council operational depot. The asset was owned and used by one telecommunication company, which was one of the leaseholders of the land. Three other telecommunication companies also leased both the monopole and the land.
In valuing this asset, we accessed a range of comparable telecommunication tower leases to determine market rent and also overlaid our assessment based on other council leases.
Special uses land valuations cover an interesting range of property types. For example, we recently provided a land valuation for the development of a substation within an existing large power station. The land was being transferred from the power station owner to the manager and operator of the network. In that case, we used a comparison method of valuation for the parcel of land within the power station.
Another uncommon special uses valuation we have recently undertaken was for a public walkway beneath the Circular Quay railway station in Sydney. In that case, the land was being compulsorily acquired under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) by one government authority from another.
The land in question was unusual as it was in a prime location but was Crown land, land-locked, under a railway bridge, and situated between supporting pillars. In that case we compared other special uses zoned properties and made the appropriate adjustments.
Another unusual valuation we recently undertook was for a council regarding the rental valuation of property and kennelling services.
The council wanted to lease vacant commercial land at the rear of an existing dog kennel service provider’s business, which abutted a council-owned park. The council wanted to engage the service provider to create kennels using shipping containers at the rear of their property for use by the council to house stray dogs. Under the arrangement, council rangers would access the kennels via the park and the service provider would provide the kennels and care for the stray dogs.
To assess the rental value for both the property and the service, we assessed comparable industrial strata and land rents. We then used a second methodology that involved a Percentage of Net Operating Profit that involved the assessment of gross revenue, vacancy / occupancy rates, operating costs and a potential profit margin to arrive to the gross rent for the improvements as well as a charge per dog per day based on an average dog size. Ultimately, we agreed with the proposed rent but suggested a lower daily charge.
bill.kassaras@opteonsolutions.com
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This article is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s valuers are qualified, experienced and certified to provide market value valuations of your property. Opteon does not provide accounting, specialist tax or financial advice.
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