What is a Commercial Valuation?
A commercial valuation involves an independent surveyor providing an unbiased assessment on the market value of any building engaged in commerce. These appraisals are not only required for a range of different purposes, but they are also recommended by many property experts. This is because, by consulting the opinion of an accredited professional, you can guarantee that you are making an informed decision on your commercial premises based on its estimated market value. The types of commercial property that are suitable for valuations include office space, dental practices, pharmacies, public houses, restaurants, religious structures, retail shops, industrial units and much more.
It is strongly advised that a commercial valuation is conducted by a professional surveyor who has been accredited by the RICS (Royal Institution of Chartered Surveyors). This way you can ensure that the appraisal will be based on years of experience in the industry, not to mention several other comparable properties that are relevant to the same commercial sector.
Depending on your individual circumstances and property type, you will require a different form of commercial valuation. Let’s look at some of the main reasons for requesting an appraisal…
Acquisition and Disposals
Regardless of whether you are buying or selling any form of commercial property, your exchange will undoubtedly benefit from the invaluable insights and peace of mind that a formal valuation can provide. For instance, by requesting a RICS regulated surveyor to conduct an official valuation (rather than an estate agent) you can guarantee that the sale price will accurately reflect the current property market. Helping any prospective purchaser to avoid paying extortionate amounts for a home which may contain significant and costly defects.
A commercial business appraisal is typically required whenever a business owner is looking to sell/gift part of the firm, obtain a financial loan or resolve an ongoing dispute with another business associate. For many of these assessments, the profits method of valuation is often utilized – This is because many of these commercial buildings will have been designed for a specific purpose and therefore sold on the merits of their trading potential. By considering at least three years of prior financial accounts, the valuer can effectively forecast the future trading potential of a commercial premises. What’s more, they will also cite several comparable transactions to support their assessments. Properties that typically require this specific method of valuation, include public houses, hotels, nightclubs, care homes, cinemas etc.
Charities Act Valuations
Under section 119 of the 2011 Charities Act, any trustee disposing of commercial property must only do so once they have requested a RICS regulated surveyor to provide a written report on the organization’s best course of action. This professional must be independent and their assessment should include the present market value of the property, advice on any works or repairs that should be conducted before the sale takes place, as well as their judgement on whether the marketing of the property represents the best and most achievable price. As these factors go beyond the standard requirements of the ‘Red Book’ it is essential that you request a valuer who is experienced in providing the necessary documentation.
SIPPS and SSAS
SIPPS and SSAS both refer to investment regulated pension schemes that are controlled by HMRC. Unlike most pension schemes, however, these programmes allow much more freedom when it comes to your investment options – this includes the potential to place your investment funds into commercial property. If you elect to do this, the company premises are then owned by either the SIPP/SSAS or a third-party tenant who leases it back to the business owner. A commercial lease is then initiated whereby the company pays its rent directly into the tax-free pension fund. However, in order to verify the viability of this investment, the rent must be determined using a formal valuation conducted by a RICS regulated surveyor.
If you require a commercial valuation for any of the above purposes, you can contact our expert and friendly sales team by telephone on 0808 169 8881 or email via firstname.lastname@example.org
What to read next
Alternatively, if you enjoyed reading this article and would like to learn more about commercial valuations, check out this list of related articles below:
Tags: Acquisition, Acquisitions & Disposals, Business Appraisals, Charities Act, charity valuations, commercial surveyor, Commercial Valuation, disposals, HMRC, SIPPS, SIPPS/SSAS, SSAS
This post was written by Marketing Team