Australia & New Zealand
Valuation and Property Standards

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14.0 Business Focus

14.3 Reports, Content and Compilation

Reports, Content and Compilation 14.3 (PDF 72 KB)

1.0 Introduction

  • 1.1 Purpose

    • The purpose of this Business Focus element is to provide Members with an indication of some of the types of reports which can be produced for clients, what they could contain and how they might be compiled.
  • 1.2 Scope

    • This Business Focus element applies to Members providing an array of reports to clients on a wide range of property types and issues, and for numerous purposes.
  • 1.3 Definition

    • For the purpose of this Business Focus element, a report is any written or oral communication of a property assessment, analysis, consulting service that is forwarded, conveyed or transmitted to the client upon completion of an assignment.
  • 1.4 Oral Report

    • Where a report is conveyed to a client in an oral communication, it is recommended that the advice be confirmed in a hard copy or other electronic or digital format capable of producing a text version.

      If instructed not to provide anything in writing, it is important to ensure this is noted in the file along with a written record of the oral advice provided.

2.0 Report Purpose

  • 2.1 Purpose dictates Report Type, Format and Content

    • Reports can have many names, but most, if not all, property reports are basically aimed at providing solutions to property problems to meet clients' needs and purposes. The problem may be as simple as not knowing some information about a property, it may involve a client s need to know what would be the best use to which to put the property, whether it is suitable security (what are the risks and Market Value) for a mortgage advance, or as complex as establishing the feasibility of a mixed category, multi-stage development proposed for a rapidly expanding area where the site needs rezoning and remediation of contamination. The purpose for which the client needs the report and the nature of the problem to be solved will both tend to dictate the:
      • • type of report,
      • • format of the report, and the
      • • content of the report.

3.0 Types of Reports

  • 3.1 Three Main Categories

    • Most report styles tend to fall into one of the following three categories:
      • • Self-contained or comprehensive style
      • • Summary or short form style
      • • Restricted or proforma style
    • • The substantive content of a report and not the size of the document alone influences which category a report fits into. Each item in each type of report should be addressed in the depth and detail as appropriate for the item, the type of
      report and purpose.
  • 3.2 Self-contained or Comprehensive

    • A self-contained or comprehensive style report generally 'descrives' its information at a comprehensive level of detail. It should contain all information significant to the solution of the property problem. It will often involve in-depth detail on each of many points under numerous headings in sections containing like information.
  • 3.3 Summary or Short Form

    • A summary or short form style report generally 'summarises' its information in a more concise form. It should contain a summary of all information significant to the solution of the property problem. It will often involve one or several paragraphs summarising in abbreviated narrative or tabular format, the main points under a major heading or section.
  • 3.4 Restricted or Proforma

    • A restricted or proforma style report 'states' much its information in a minimal presentation. The headings are often decided by the client (who tends to be a volume user of Members reports) who requires information briefly stated. It will often involve a combination of brief narrative statements and simple fact statements or bulleted points.
  • 3.5 Deciding type or style

    • In deciding the type or style of report appropriate in any instance, the following should be considered:
      • • the client s requirements,
      • • the client s level of understanding of the particular type of property and its market,
      • • the purpose of the assignment or task.

4.0 Report Formats

  • 4.1 Institute does not Dictate Format

    • While the Institute does not dictate the form, format or style of reports, it may assist Members by indicating what could be provided or it may produce formats for particular client groups to enable the benefits of uniformity to be gained.
  • 4.2 Word Processor Report Templates and other Useful Features

    • Modern word processing programs often provide report templates. They also include many features enabling very professional reports to be produced readily. These include:
      • • page headers and footers
      • • automatic page numbering
      • • automatic table of contents
      • • great variety of font types, sizes and enhancements such as bolding and italics
      • • table format control
      • • spell and grammar checks
      • • import data and graphs
      • • and many others.
    • New features are continually being added to these programs. Even if you have an existing program which appears to still be doing the job after three or four years, the advances are well worth the cost of upgrading. Many packages are offered today which include word processing, spreadsheet, database, graphics, organisers and presentation assistants. The package cost is often less than the cost of a single program just a few years ago and there are many more features. Databases can also be used to produce a report while capturing data to add to the database or using information already in it. Making the move can also be an ideal opportunity to upgrade hardware as well. Often, all a client sees of you is the reports you send in. Don t sell yourself short by submitting poorly presented and formatted reports. The annexure to this Business Focus element will also give an indication of how your report could be formatted.
  • 4.3 E-commerce Era

    • The electronic commerce era is gathering pace. In the US and Canada it is already having significant impact on our profession in the residential mortgage reporting market. e-commerce for our profession is not about e-mailing files as many of us at first thought. Reports are generated out of a database and the content transmitted to the client as data fields. A significant number of Australian lenders are already well advanced in their plans in this area. e-commerce will have a significant impact on our professional lives. Our quick uptake in this area will be necessary if we are to remain relevant to our clients in their new ways of doing business. Initial indications are that it will best suit shorter form reports which will need to be consistent in format.

5.0 Report Content

  • 5.1 Deciding on Content

    • The content of reports will vary greatly. With comprehensive and summary style reports the content can be decided by focussing on the subject, the purpose and the client s needs or problems and objectives.
  • 5.2 Comment on Extent of Process

    • It is recommended that in each type of report that you comment on the extent of the process of collecting, confirming and reporting data. However this description should not be out of proportion to the length of the report.
    • With a comprehensive report the full extent of the process should be apparent to the report reader so such comment can be briefly stated.
    • With a summary report the full extent of the process may not be apparent to the reader, so to protect yourself, summarise the process.
    • With a Pro-forma report the full extent of the process will not be apparent to the reader so either the pro-forma or a supporting memorandum referenced in the report should describe the process.'
  • 5.3 Reference to File Material

    • It is also recommended with the summary and pro-forma reports that reference be made to the existence of appropriately detailed file material in support of the conclusions and that from these a comprehensive report can be compiled by further arrangement.
  • 5.4 Caution any Limitation on Content

    • Where a client requests less content than is considered appropriate for the purpose, it would be prudent to include a covering comment on this limitation in the report noting that the detail is held on file and can be provided by further arrangement, (while also cautioning if the omission of that content could mislead or not adequately inform the client or any party authorised to rely on the report). If any restriction or limitation is imposed by the client on 'normal processes', great care should be taken.
  • 5.5 Clearly and Logically Presented and Adequately Detailed

    • It is important for the content of a report to be clearly and logically presented and adequately detailed for the purpose.
    • This applies especially to self-contained or comprehensive style reports. These will tend to comprise the following main parts:
      • • Summary - of the report and its findings or recommendations
      • • Body of the report comprising:
        • - Property and/or Project - adequately described for the purpose.
        • - Market - relevant dynamics and data.
        • - Assessments, Consideration of Issues and Risk Analysis (if relevant).
        • - Solutions if relevant.
      • • Annexures (addenda, appendices etc.) which are generally support material providing additional detail which has often been gathered from other sources.

6.0 Report Balance

  • 6.1 Focus on the Problem and Solution not the Subject

    • It is important to keep reports in balance. The description of the subject should not out-weigh your focus on the market and the development of your solution to the property problem. In the past there has been client comment that some reports provide lots of detail about the property but very little about the market or the solution to the 'property problem', and that the position should be reversed.
    • As a Member and a property professional, your point of difference is your ability to provide solutions to property problems, not just describing property, - which is sometimes well known to the client anyway.
    • The key is in 'value adding' - putting content in your report which adds to your client s knowledge, not putting in lots of content which the client already knows or is not relevant to the current problem. The information which you have is not knowledge until it is in the hands of a client who can turn it into value. You can turn it into value for your client by solving his property problems with it.
  • 6.2 Sufficiently Detailed Summary

    • Balance is also achieved by understanding the client s requirements and situation. While a client may require a comprehensive report (or in cases where such is warranted and provided), it is becoming increasingly obvious that busy clients do not have time to fully read the whole document.
    • Though many reports provide an 'Executive Summary', often these do little more than indicate that the property has been inspected, that it contains certain improvements and a brief note of the particular property solution. Some clients then have to go through the whole report to prepare their own summary.
    • Balanced reporting at the 'stand alone' or 'comprehensive' level should p rovide a summary sufficiently detailed that it could almost pass as a Summary or Short form Report.
    • The reader should be able to gain an adequate understanding of the subject of the report, the relevant market, the main considerations and the solution to the property problem. Any aspect of concern can be explored further in the body of the report, the reader can come back to the balance of the report as time permits, or the report can be referred to someone else to follow up. The 'Summary', which could be 2-7 pages long, should touch on the main points of the report so that the reader will gain an overview of the purpose and subject of the report, the relevant market, the main considerations and the solution to the property problem.
  • 6.3 Balance in Issues and Language

    • Balance in report content also requires a balance in the issues addressed and the language used. The report should:
      • • Objectively address upside and downside potential;
      • • Not be over-glowing in the positive aspects or unduly critical in negative aspects;
      • • Not infer things which should be detailed or explained;
      • • Not avoid or be silent on important issues;
      • • Not use jargon, abbreviations or unexplained technical terms unless suited to the client;
      • • Lead to a conclusion clearly supported by the report content.
  • 6.4 Balance in Short-form Reports

    • Balance is also important in summary or shortform reports. While many practices use standard descriptions of a town or city, it looks obvious and out of balance when one suitable for a comprehensive report is inserted into a short-form report. It too should be scaled down to a summary version only.
  • 6.5 Challenge of Pro-forma Reports

    • Pro-forma reports sometimes pose a challenge in deciding just what and how much information needs to be provided. Pro-formas are often designed or utilised by the client to meet a need (usually to gather just the important information in 'stated' or point form covering key aspects only).
    • However, if a particular key aspect of the subject property is so important that the client should be informed beyond the space provided on a fixed field pro-forma, it is appropriate to provide an addenda to the pro-forma.

7.0 Report Content Prompters

  • There are many ways/combinations of techniques to produce a report. With the benefit of word processors, some people save a duplicate copy of a similar property report and change it as necessary. There are several inherent dangers with this method. Firstly, some detail that should be changed or deleted might not be, and secondly, some points that may not have been relevant in the first might be overlooked in the second.
  • Perhaps a safer method is a report layout template containing any standard content with prompters built in. Annexed to this Business Focus element is a Report Compilation Prompter which you can be use to select major section headings for your report and points under a range of sub-section headings from which to choose appropriate content. Out of this you can build a report template or shell with your standard content into which you insert the variables based on a selection of the prompters as relevant. While the headings and points are comprehensive, they are not exhaustive. Whatever system you use you will probably find it handy in building your reports. Add to it as necessary.

Annexure 1 - Comprehensive Report

(Nature of Problem Addressed)

Type of Property/Market Segment

Address of Property

Photo if appropriate

Under Instructions From:

For the Use and Benefit Of:

Your Ref. / Order No:

Our Ref:

Table of Contents

  • 1.0 EXECUTIVE SUMMARY
    • 1.1 Summary of Report(Executive Summary)
    • 1.2 Recommendations
    • 1.3 Assessment(s)
  • 2.0 CLIENT
    • 2.1 Client Details, Purpose and Objectives
    • 2.2 Required Assumptions and Limitations
  • 3.0 PROPERTY (if appropriate)
    • 3.1 Title and Property Detail
    • 3.2 Planning Control
    • 3.3 City or Town(or nearby main town) -- by name
    • 3.4 Location and Locality
    • 3.5 The Land
    • 3.6 Services
    • 3.7 Improvements
    • 3.8 Construction
    • 3.9 Occupancy and Outgoings
    • 3.10 Trading
  • 4.0 PROJECT (if appropriate)
    • 4.1 Project Details
  • 5.0 MARKET ANALYSIS (if appropriate)
    • 5.1 Marketability
    • 5.2 Condition of the Market
    • 5.3 Market Dynamics
    • 5.4 Market Data (as appropriate)
      • 5.4.1 Property Sales
      • 5.4.2 Property Rentals
      • 5.4.3 Rates of Return
      • 5.4.4 Developer s Profit
      • 5.4.5 Vacancy Rates
  • 6.0 ASSESSMENTS (if appropriate)
    • 6.1 Valuation Approaches
      • 6.1.1 Sales Comparison Approach
      • 6.1.2 Capitalisation Approach
      • 6.1.3 Summation Approach
      • 6.1.4 Hypothetical Development/Residual Value Analysis
      • 6.1.5 Financial Modelling/Discounted Cash Flow
    • 6.2 Assessment
  • 7.0 PROJECT FEASIBILITY (if appropriate)
    • 7.1 Feasibility Study
    • 7.2 Sensitivity Analysis
  • 8.0 ISSUES (as appropriate)
    • 8.1 Subject Property
    • 8.2 Project
    • 8.3 Neighbouring Properties and Neighbourhood
    • 8.4 Market
    • 8.5 Assessments
    • 8.6 Feasibility
  • 9.0 RISK ANALYSIS (if appropriate)
    • 9.1 The Property/Project, The Market and Trends
  • 10.0 STRATEGY (if appropriate)
    • 10.1 Alternatives
  • 11.0 RECOMMENDATIONS
    • 11.1 Recommendations
  • ANNEXURES

1.0 Summary

  • 1.1 Summary of Report

    • • Brief summary of client details and objectives
    • • Note any special conditions, assumptions or limitations required
    • • Brief summary of the subject of the report
    • • If includes a project, describe briefly
    • • Summarise market analysis
    • • Outline main issues
    • • Outline main findings
  • 1.2 Recommendations

    • o List Recommendations (or alternatives)
    • • Report Date
    • • Signature of Member
    • • Name, Qualifications etc
    • • Draw attention to assumptions and limitations contained in report (or list)
    • • 'Report is for the use only of ....'
    • • 'No extract from this report may be included ....'
  • 1.3 Assessments

    • • State the extent of the process of collecting, confirming and reporting data
    • • What interest has been assessed and for what purpose
    • • Date of assessment
    • • Market Value definition
    • • If a project, define 'as if complete' or 'on completion'
    • • Assessment in words and figures
    • • Note any special inclusions or exclusions which are not real property

2.0 Client

  • 2.1 Client Details, Purpose and objectives

    • • Client name (if an organisation, include name of instructing representative)
    • • Purpose for which the report is required
    • • Statement of understanding of Client requirements and objectives
  • 2.2 Required Assumptions and Limitations

    • • State any assumptions required by client or limitations imposed

3.0 Property

In this Section, choose headings as appropriate and renumber

  • 3.1 Title and Property Detail

    • • Known As/Situated
    • • Legal Description
    • • Area
    • • Dimensions
    • • Title and Reference
    • • Restrictions, Encumbrances, leases etc. noted therein
    • • Recorded Ownership
    • • Nature of interest in the property
    • • Rating and taxing information
  • 3.2 Planning Control

    • • Zoning and Scheme Reference
    • • Objectives of the zoning
    • • Allowable uses without consent
    • • Allowable uses with consent
    • • Prohibited uses
    • • Existing approvals and prior approvals and reference
    • • Any Heritage implications
    • • Planning requirements affecting any proposed uses or development
    • • Community and political environment
    • • Any Approvals for nearby properties
    • • Other broad Council policies which could affect the property eg. buffer zones, height restrictions, heritage areas etc.
    • • Any particularly important State Environmental Planning Policies
    • • Any proposed changes of zoning or draft plans
    • • Statutory Charges applicable
    • • Landscaping requirements
    • • Carparking requirements
    • • Sunset clauses
    • • Subdivision requirements
    • • Floor Space Ratios
    • • Site setbacks
    • • Permitted densities
    • • Planning Certificates sighted
  • 3.3 City or Town (or nearby main town) --- by name

    • o Profile as relevant to the task and client
    • • Provide extra detail for non-local clients and indicate relative position to main centres
  • 3.4 Location and Locality

    • • Side of street and nearest cross street (distance & direction)
    • • Nature of street (highway, main arterial, local through street, cul-de-sac)
    • • Number of lanes, median strip
    • • Traffic flow
    • • Locality or suburb name
    • • Km to CBD
    • • Nearby development
    • • Trend - redevelopment
    • • Changes - traffic flow pattern, population, demographics, new developments, existing traffic generators ceasing or changing operations
    • • Proximity to beneficial features
    • • Any particularly adverse features
  • 3.5 The Land

    • • The site has been identified by reference to (DP, Survey Plan etc.)
    • • Shape
    • • Size
    • • Inside/corner
    • • Elevation in relation to street level
    • • Slope
    • • Soil type
    • • Fill
    • • Landslip
    • • Erosion risk
    • • Drainage
    • • Flooding or watercourse
    • • Easements, (or service conduits without easements)
    • • Suitability for building - geo-technical report required?
    • • Possible encroachments, setbacks from apparent boundaries
    • • Impact of adjacent properties
    • • Aspect
    • • Views
    • • Buffer zones
    • • Other environmental hazards eg. wind, fire, salt air, urban salinity
    • • Hazardous or offensive development
    • • Legal access
    • • Physical ingress/egress for vehicles and pedestrians & ease of
    • • Passing trade
    • • Noise Nuisance including flight paths and road noise
    • • Comment on history of site as a lead in on contamination
    • • Any apparent cause for contamination concern
    • • Is any proposed use likely to cause contamination
    • • Air pollution
    • • Mine subsidence proclamation area
    • • Conservation orders or Heritage issues
    • • Native Title -- claim or prospects thereof Rural - (additional to any relevant from above list)
    • • Altitude (range?)
    • • Rock
    • • Millable timber
    • • Carrying capacity
    • • Rainfall incidence and variation
    • • Land slip o Salting
    • • Access to & within the property
    • • Topography
    • • Original timber
    • • Average yields crops
    • • Versatility of land use
    • • Flooding
    • • Weeds
    • • Erosion
    • • Soil compaction
    • • Views
    • • Soil types/areas
    • • Timber remaining
    • • Crop types typical and actual
    • • Drought
    • • Pests
    • • Acid soils
    • • Frost or hail prone
    • • Home site
    • • Various SEPP s (NSW) including
    • • SEPP 14 (Coastal Wetlands)
    • • SEPP 30 (Feedlots & Piggeries)
    • • SEPP 37 (Continued Mines & Extractive Industries)
    • • SEPP 46 (Clearing - Flora & Fauna) Farm Improvements (other than main buildings)
    • • Internal roads
    • • Erosion / landslip control measures
    • • Fencing - boundary & subdivision
    • • Water - natural, catchment, storage & reticulation, domestic supply
    • • Irrigation - licences and details, controlling authority, water supply source & cost, reliability & current availability, delivery system & cost, layout, drainage.
    • • Pasture - types, condition and fertiliser history
    • • Plantations - type, number/area, age, condition, yields.
    • • Timber regeneration areas / woodlots
  • 3.6 Services

    • • Electricity
    • • Gas
    • • Kerb & gutter
    • • Schools m/km
    • • Services adequate
    • • Water
    • • Phone
    • • Footpath
    • • Shops m/km
    • • Distance to silos
    • • Sewer/septic
    • • Road surface
    • • Transport m/km
    • • Parking
    • • Distance to Markets
    • • Where relevant, provide location of services
  • 3.7 Improvements

  • Main Structure
    • • Present use
    • • Building Type
    • • Built circa/exact year
    • • If strata, being one? of x units in the development
  • 3.8 Construction

    • • External walls
    • • Floors
    • • Roof covering
    • • Wall frame
    • • Footings
    • • Roof frame
    • • Internal linings
    • • Windows
    • • Ceiling linings
    • • Shop front
    • • Ceiling height
    • • Awning
  • Accommodation / Use Areas
    • • List main rooms / use areas (in a bulleted list or run-on style)
      • Approximate Areas
    • • List each main part of a building and show areas offset to the right As applicable:
      • Living areas m2
      • Patio & Verandah m2
      • Garages m2
      • Commercial Building m2 GBA/m2 NLA
      • Lockup Shop m2 NLA
      • Warehouse m2 GBA
    • • Functional plan
    • • Correct design criteria
    • • If purpose built - adaptable? /alt. uses?
    • • Adequacy of areas
    • • Suit current use
    • • Obsolescence
    • • Loading areas
    • • Design aesthetics
    • • Any obvious non-compliance
  • Features and Standard
    • • Built-in features
    • • Floor coverings
    • • Air conditioning
    • • P.C. Items list/quality
    • • Window coverings
    • • Tenant improvements/fit-out
    • • Light fittings
  • Building Services (mainly commercial & industrial)
    • • Aircond./ventilation
    • • Special Electrical
    • • Elevators & escalators
    • • Sprinklers
    • • Lighting
    • • Goods lift
    • • Hydrants/fire hoses
    • • Security system
    • • Special Technology
  • Y2000 (Y2K) Compliance CGT Issues Impacting
    • • Effect on property/business
    • • Effect on value/security risk
    • • Market sentiment on issue Structural Condition
    • • List any significant problems or state if none readily apparent.
    • • Note if engineer s certificate required
  • Repairs and Maintenance
    • • List any significant items/state if no readily apparent major items outstanding
    • • List major refurbishment or upgrading required and estimated cost
  • Pests
    • • Note any apparent problems/state if no termites or pests evident.
    • • Recommend inspection by reputable pest control company if warranted
  • Occupational Health & Safety
    • • Asbestos
    • • Trade Waste
    • • Un-healthy building
  • Farm Buildings and Structures
    • • Brief description of use, size/capacity of each in bulleted form.
  • Ancillary Improvements
    • • List these in bulleted form broadly classified, (eg. fencing, paving, landscaping, detached minor buildings, carparking, service areas, signage, yard lights etc.)
    • • If strata, general description of shared amenities, facilities, common property.
  • 3.9 Occupancy and Outgoings

  • Epitome of leases - following detail as available or appropriate
    • • Premises identification
    • • Lessee
    • • Commenced
    • • Expiry
    • • Term
    • • Commencing rent
    • • Current (passing) rent
    • • Total occupancy cost
    • • Area occupied
    • • Car spaces if included
    • • Lessee outgoings
    • • Review method & frequency
    • • Next review
    • • Option(s)
    • • Use permitted by lease
    • • Unusual provisions
    • • Option to purchase
    • • Original or copy
    • • Sighted
    • • Signed/Stamped
  • Comments
    • • Occupancy status - vacant/owner-occupied/ tenanted
    • • Note areas unable to inspect and give reason
    • • Sight rent review documents (comment if not available)
    • • Terms certain remaining
    • • Total Passing Rent
    • • Naming rights rental
    • • Face rents/effective rents
    • • Overage rent
    • • Rack rents
    • • Reversions
    • • Characteristics of the income stream
    • • Security of rental income
    • • Arrears or non-payment
    • • Arms length dealing
    • • Deposits or guarantees held
    • • Tenant fitouts
    • • Incentives given
    • • Highlight leases expiring, options being exercised or new leases pending
    • • Tenancy mix
    • • Vacancy factor
    • • Vacancy history
    • • Standing of major tenants
    • • Any retail leases legislation compliance
    • • If a project, asking rents and any precommitments
    • • Incentives offered or required by the market to maintain or attract tenants
    • • Is the property managed & if so does it appear effective
    • • Is there any excess land for which no effective rent is paid
    • • If the property is owner-occupied, what would be reasonable market terms and conditions for a lease
    • • Term
    • • Options
    • • Initial Rent
    • • Review method
    • • Review frequency
    • • Outgoings responsibility
    • • If the property is not leased at present, allowance for loss of rent and leasing up?
Outgoings (actual or estimated) and Recoveries (actual)
  Outgoings Recoveries
Rates $ $
Land Tax $ $
Insurance $ $
Repairs and Maintenance $  
Cleaning $ $
Air Conditioning $ $
Electricity $ $
Lift Maintenance $ $
Management $ $
Fire Protection $ $
Pest Control $ $
Security $ $
Body Corporate Fees $ $
TOTALS $ $
  • Outgoings equate to approximately $per m2 of net/ gross lettable area
    • • Is major expenditure above normal R&M required to maintain rental levels? Comparison with normal building maintenance costs.
  • Rental Income Summary
    • Rental Income $
      Plus Recoveries $
      Gross Rental Income $
      Less Outgoings $
      Net Rental Income $
  • 3.10 Trading

    • If a specialised trading property and goodwill is included, consider the following:
    • • Nature of trade and management
    • • Comments about trade - past, present and trend.
    • • Outline/summarise trading figures as supplied and/or adjusted
    • • Adequacy of business records/financial returns kept - if inadequate or not available, what effect on capitalisation rate and marketability.
    • • Business systems adequacy including Y2K compliance
    • • Explain any adjustments
    • • Treatment of chattels, plant and equipment

4.0 Project

4.1 Project Details

  • • Describe project/renovation program
  • • Building approval detail and conditions
  • • Extent of plans and documentation prepared
  • • Fees, levies and charges paid to date
  • • Builder
  • • Plans & Specifications
  • • Estimated Cost
  • • Licence No.
  • • Engineer s Details
  • • Work by owner
  • • Quote/Contract Price
  • • Construction Period
  • • Progress Inspections
  • • Development Program
  • • If work in progress, indicate:
  • • stage of construction
  • • Estimated cost of work carried out in relation to contract price
  • • Estimated cost to complete the project under the current contract
  • • Estimated completion period

5.0 Market Analysis

  • 5.1 Marketability

    • • SWOT analysis - Strengths, Weaknesses, Opportunities & Threats - go through sections on property and project to address significant aspects especially location, and if a project, timing
    • • Overall market appeal and/or status of the property
    • • Any subdivision potential - position of any structures
    • • Any onerous encumbrances on title
    • • If any contamination, is stigma likely after remediation
    • • Economic/functional obsolescence, costs and merits of remedying
    • • Code non-compliance - cost and allowable time frame to meet requirements
    • • Purpose built building - suitability for conversion and cost
    • • Year 2000 compliance - anything affected e.g. lifts, air conditioning
    • • CGT Impact on marketability, value and replacement insurance
    • • Alternative uses
    • • Is existing use Highest and Best Use otherwise what is
    • • Physical capacity of site
    • • If a redevelopment site, demolition, site access problems or cramped site conditions
    • • Under/over capitalisation
    • • Any land surplus to current requirements or for which no rental return achieved
    • • Native Title issues
    • • Heritage/National Trust issues
    • • Strength of tenancies
    • • Any significant reversionary income
    • • Upcoming vacancies
    • • Likely tenant profile
    • • Buyer motivation and requirements
    • • Vendor motivation
    • • How good is the total package
    • • Comparative position in the market place - market segment
    • • Any measures which would improve the property s market position and advantage
    • • Is there any 'marriage value' potential
    • • Is there any potential to fragment or disaggregate the property
    • • Any inherent factors which could impactfavourably or adversely on value
    • • Any other special factors bearing in mind the purpose of the Report
    • • Marketing method alternatives
    • • Marketing strategy
    • • Any adverse impact of legislation e.g. Disability Discrimination Act
  • 5.2 Condition of the Market

    • • Supply - sales/leasing listings level, private offerings
    • • Supply trend - new product being constructed/developed, approved
    • • Asking prices trend
    • • Demand level - sales/leasing rate, enquiry level, pent up demand
    • • Demand trend
    • • Rates of Return (yield) trend
    • • Buyer s/Seller s market
    • • Current position in the property cycle
    • • Prospect of market turning
    • • Ease of sale/leasing - likely marketing/letting up period
    • • Vacancy rate and trend
    • • Rental value trend
    • • Current marketing/leasing period and trend (if extended, give reasons)
    • • Incentives being offered/demanded
    • • Finance availability and cost
    • • Building cost trend
    • • Timing of project - anticipated market conditions on completion
    • • Existing competition - prospects of increased competition
    • • Prospects of change in Council or Govt. policy or regulations
    • • General economic indicators - CPI, interest rate climate, bond rate
    • • Prospect of market rising and/or falling in the short and medium term - local, national or international factors likely to which might impact on market
    • • If rural enterprise, price trend for produce - local & global factors affecting
    • • Current seasonal conditions
  • 5.3 Market Dynamics

    • • Profile of sellers/buyers in this market segment
    • • Most likely type of buyer
    • • Profile of lessors/lessees in this market segment
    • • Most likely type of lessee
    • • Main market drivers
    • • Considerations made by typical buyers/sellers, lessors/lessees
    • • Investor activity
    • • Mortgagee sales activity
    • • Motivation of vendors and purchasers/lessors/ lessees
    • • Historical market volatility
    • • Influence of marketing agents
    • • Predominate sales/leasing method
    • • Market sentiment - consumer & business confidence levels & trends, unemployment
    • • Market price range and typical market segments
  • 5.4 Market Data / Market Indicators

    • 5.4.1 Property Sales
      • • Sources of information
      • • Sales details and analyses
        • - Address/Name of property
        • - Legal description
        • - Date of Contract
        • - Price
        • - Land Area
        • - Zoning
        • - Improvements
        • - Lessee
        • - Term of lease
        • - Net lettable area (NLA) - GBA for industrial
        • - Net rent
        • - Net Profit
        • - Indicates - yield or appropriate unit of value
        • - Comments (including any special conditions or circumstances)
      • • Current/Most recent sale of the subject property - movement since
      • • Asking prices (including subject property)
      • • Offers (including for subject)
      • • Evidence of market movement - recent and long term trend line.
    • 5.4.2 Property Rentals
      • • General summary of rental levels, or
      • • When detail readily available and public knowledge:
      • • Premises
      • • Area occupied
      • • Use permitted
      • • Car spaces if included
      • • Lessee/occupant
      • • Term
      • • Commenced
      • • Expiry
      • • Option(s)
      • • Review method & frequency
        o Next review
        o Commencing rent
        o Current rent
        o Lessee outgoings
        o Total cost of occupancy
        o State if actual rents on subject are in line with the market
        o Any reversionary income for subject property
        o If a vacancy exists or occurs at present, could the area be leased at a similar rental and how long could it take to find a new tenant
        o If a development project, are the asking rentals achievable and sustainable
        o What is level of competition from existing developments and other proposals or developments which could come on-line in a similar marketing period
    • 5.4.3 Rates of Return
      • • Discuss the relevance and application of each sale which indicates a cap. rate
        o Considered range applicable to this property
    • 5.4.4 Developer's Profit
      • • Where available, provide analysed market evidence of developer s profit
        o Where analysed evidence is not available, provide indication of profit expectation
    • 5.4.5 Vacancy Rates
      • • Historical and current vacancy rate for the subject property
        o Historical and current vacancy rate in this market segment
        o Vacancy rate trend.

6.0 Assessments

  • 6.1 Valuation Approaches

    • Indicate which methods of valuation adopted and why
  • 6.1.1 Sales Comparison Approach
    • • Brief explanation of what the approach does
      o Compare sales with subject property making appropriate adjustments for differences in the property itself and for such factors as movement in the market and in circumstances of sale, or alternatively o Deduce rates per unit of comparison (m2, unit/flat, hectare etc) and apply to the subject property.
    • • Indicate value or value range indicated
  • 6.1.2 Capitalisation Approach
    • • Brief explanation of what the approach does
    • • Set out the approach, which could be along the following lines (adjusted as necessary) and include reference to section of report the figure used was derived from
    • Rental Income (section 6.1.2) $
      Plus Recoveries (section 6.1.2) $
      Gross Rental $
      Less Vacancy (section 6.1.2) $
      Outgoings (section x.x.x) $
      Net Rental $
      Capitalised (section x.x.x) @ % = $
      @ % = $
      @ % = $
      Adjustments
    • Where no effective rent paid for 'excess land'
    • Plus Excess land (section 6.1.2) $
      Where major expenditure required to achieve adopted rental level
      Less Significant
      R & M (section 6.1.2) $
      Cost to Convert (section 6.1.2) $
      Where vacant or valued on vacant possession basis
      Less Loss of Rent (section6.1.2) $
      Leasing Fees (section 6.1.2) $
      Indicated Value Range $
  • 6.1.3 Summation Approach
    • • Brief explanation of what the approach does
    • • Set out the approach, which could be along the following lines (adjusted as necessary) and include reference to section of report the figure used was derived from As applicable:
      • Land $
        Main Structure $
        Other Improvements $
        Holding Costs & Entrepreneurial Profit $
        Goodwill $
        Licence $
        Indicated Value $
  • 6.1.4 Hypothetical Development/Residual Value Analysis
    • • Brief explanation of what the approach does
    • • Set out the approach as appropriate to the particular exercise
  • 6.1.5 Financial Modelling/Discounted Cash Flow
    • • Brief explanation of what the approach does
    • • Set out the approach as appropriate
  • 6.2 Assessment(s)

    • • Explain market sensitivity - value is most probable selling price within a range
    • • Insert value definition as appropriate:
    • • Market Value
    • • Alternate use value
    • • Value as if complete/Value on completion
    • • Rental value etc
    • • Reconcile the approaches adopted
    • • Indicate why any of the usual methods may not have been used
    • • Set out the value(s) adopted

7.0 Project feasibility (evaluat ion)

  • 7.1 Feasibility Study (Project Evaluation)

    • • Refer Real Property Guidance Note 5 [ANZRPGN 5]
  • 7.2 Sensitivity Analysis

    • • Refer Real Property Guidance Note 5 [ANZRPGN 5]

8.0 Issues

In this Section, identify and explain the relevance of the issues (under the following headings as relevant) that impact on the needs and objectives of the client or the purpose of the report.

  • 8.1 Subject Property

  • 8.2 Project

  • 8.3 Neighbouring Properties and Neighbourhood

  • 8.4 Market

  • 8.5 Assessments

  • 8.6 Feasibility

9.0 Risk analysis

  • 9.1 The Property/Project, The Market and Trends

10.0 Strategy (if relevant )

  • 10.1 Alternatives

    • • List

11.0 Recommendations (if relevant )

  • • List

Annexures

  • • Include as necessary to support and enhance report.