Your client is entitled to take over a freehold

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3. Your client is entitled to take over a freehold property after 5 years. The full market rent of the property is estimated to be $80,000 net and yield of similar property is 8%. Assess the value of your client's interest.
4. The existing rent of a freehold shop is $25,000 pa. It is due for review in 3 years under the lease to $35,000. Market analysis shows that yield of similar property in the area is 10%. Estimate the market value of the freehold interest.
5. Your client is the freeholder of a shop which is subject to a lease with 8 years unexpired term and no rent review clause. The existing rental is $35,000 pa. Current full market rental of similar property is $50,000 pa and freehold yield is 7%. Value his interest.
6. An investor is interested in an office property which has recently been let to a leading solicitors firm at full market rent of $85,000 pa net. The asking price of this investment opportunity is $1.3 million. What is the yield to the investor if the property is bought at this price? If the rent is in payable monthly in advance, what is the true yield to the investor?
7. No. 2 Whitetown Road was recently let for $15,000 and the freehold subject to the lease was sold for $187,500. Value No.6 Whitetown Road which is slightly smaller but otherwise identical. It has recently been let for $13,500. If the rent is payable monthly in advance, what yield is obtained by the purchaser? Based on this new yield, value the property again assuming the rent is paid monthly in advance.
8. An investor has just bought the freehold of an office premises which is subject to an existing tenancy with 3 years unexpired for $2,500,000. The rent passing is $150,000 pa net. Similar premises with vacant possession were sold recently at a yield of 9%. Determine the market value of the premises if it were let at full market value.
9. Determine the equivalent yield of the following property investment: Term rent $35,000 pa for 3 years, term yield 6% Reversionary full market rent $50,000 pa, reversionary yield 8% Sale price $620,000
10. A city centre freehold office building is subject to a lease with 14 years unexpired at a fixed rent of $47,500 per annum. Evidence shows that the current rental value is $165,000 per annum and properties of this type let at full rental value would be valued using a yield of 6.5%. Government bond yield at the moment is 8.5%. a) Using term and reversion approach value the value of the freehold interest.
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