Posted: September 17th, 2017

Property valuation

Property valuation

Word length: 1,500words(excludingtitlespage,graphsandannexures).

Based onthesaleinformation below,you arerequiredto prepareareportto verifyifthesalepriceisjustifiedbythemarketevidence.Inotherwords,youhavetousemarketevidencetoverifyifthe passingrentisatmarketlevel,andif thesale priceand yieldarereasonable havingregard tothe then market condition.Inthisregard,youneedtoaccess salesevidenceintheSydneyoffice market.UWS has subscribedtoRPData(https://rpp.rpdata.com/rpp/login.html)(andyou are allowedto assess the databaseusingthefollowing usernames and password.

1.statval01

2.statval02

3.statval03

Details

Thecommercialpropertymarketisoneof themajorsectorsin theAustralian propertymarket.The marketvalueofcommercial propertiesis dependentonthe saleofsimilar properties.Thefollowingisarecent sale of acommercialproperty inSydneyCBDreportedinCommercialResearchofCoreLogic(i.e.RPData)on
4June2015.

Hong Konginvestors buy North Sydney office tower for $58 million

ANorthSydneyofficetowerhaschangedhandsat$58million.Theproperty,at
140ArthurStreet,NorthSydney wassoldby BevanKenny andChrisVeitchof ChestertonInternational(NorthSydney) andDominicOng andJamesParry of KnightFrankSydney.VendorwasfundmanagerCorVal,onbehalfoftheVictorian Funds ManagementCorporation(a Victorianfundwhichprovidesinvestment and funds managementservicestoVictorian publicauthorities),Funds SA(a SA fund whichmanagesandinvestspublicsector assets)andtheFutureFund(aFederal fundtohelpmeetfuture superannuationliabilities).

The buyer, HKRealway,is owned byLingLWong andYunC ChoiofHongKong andis aprivatecompanythat engagesin overseas propertyinvestmentand management.

Thesalefollowsitspreviouspurchasesofa13-storeyofficebuildingat309
GeorgeStreet,Sydneyanda10-levelcarparkingstationat521–527KentStreet, Sydney.

AccordingtoNorthSydney Cityscope,theproperty isa17-storey officebuilding withbasementparkingwhichwascompletedin1973andrefurbishedin1996.With a building areaof 8,384sqm,the propertyhas aNABERSratingof 3.5starts. Itis
fully leased and its major tenants include NSW Business Chamber, Active
International andUniversityofSouthAustralia.

Theproperty lasttradedat $39millioninDecember2012whichrepresentedan initialyieldof9.53%onpassingincomeof$3,727,100. Thissale, at$58 million, equatestoayieldofabout7.5%andisevidencethatthecommercialmarketis
alsoperformingstronglyin this risingSydney market.

Apartfromverifyingthe marketrentand marketpriceoftheproperty,youarealso requiredtocomment onwhy thesame propertyhadayield of 9.53%in 2012, but ayieldofabout 7.5%in thecurrentsale.

Forthepurposeof completingthisassignment,youmaymakereasonable assumptions for relevantinformationofthepropertynotreportedbyCoreLogic.

Relevantinformationfor this assignmentcanbeobtainedfrom: Newspapersand property magazines
Property JournalsandNewsletters

Australian BureauofStatistics

Marketreports(suchasJonesLangLaSalle,ColliersJardine,CBRichard

Ellis, etc.)

Friends intheproperty industry

Internetresources