Minimum valuation of my property?

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    Minimum valuation of my property?

    Hi all,
    I know this is my first post, but this forum seems busy and interesting and hopefully has some knowledgable people.
    I own a commercial property and I have someone local who I know owns a bunch of shops and converted flats above in the same road so it could be serious. However he's screwed so I need to be on gaurd and go in from a position of strength

    I bought my property freehold, quite a few years ago,it's on a busy high street in north london in the suburbs, near tube, in a reasonably upmarket and busy area.

    The property contains 2 small shops, each on long leases producing £20k each, and 4 large good quality semi luxury offices (marble entrance etc) above the shops and also on stilts behind shops with car park under part of it (just under 5000 sq feet of all offices) producing 30-35k each a year. Total around 160k a year. All offices are on long leases of around 9-10 years left and 1 has only 5 years left. Everyone pays on time no problems. They are only upwards rent reviews for them all and break clauses both ways at around the 5 year mark. The building also has a car park for up to 10 cars (at a squeeze) and we only use 5, so I was thinking I could build a ground floor for the back offices instead, losing 5 spaces but gaining another office (possibly slightly less rent around 25k seeing as it would have less light then others, and less desirable, for a cost of build of less than 100k as roof and walls exists on top of car park where the office would go.

    Finally, the building next door has even built above another floor, so I would imagine I would also get planning permission, and I could probabaly build an extra2 offices on top of the building, circa 1000sq feet each but possibly would need structural work (I have no idea yet).

    If I only do the easy build of the car park which would be much easier and cheaper and nothing structural, i would probabaly achieve £185k a year.

    If I did all this, and somehow built above, my rental income would be at least 230-240k+ a year, but, I have never built anything before and would not know where to start and costs could be high.

    So my question is, based on the above, is there a minimum value I should consider or hope for at this stage considering the good location and filled up spaces? Would it be prudent to sell pre-building for a possible premium, or only post building? Finally, is it even worth selling now, considering I'm 42 and would pay off my mortgage anyway in 10 years. I'm sure it's gone up in 10 years. I know my rental income has gone up by double.

    As I don't trust my local estate agents to value anything, as I know they try to find buildings and sell things cheap to their list of mates. Not nice, but it's the way it is...

    Any help or suggestions would be gratefully accepted either as some sort of all park possible estimates, of possible worth now and possible worth post-build of just car park office, and perhaps post-build of car park offices AND extra offices on a new top floor that I would have to get built.

    Thanks all an all suggestions appreciated...

    #2
    Originally posted by Dozwold View Post
    The property contains 2 small shops and 4 large offices. The building also has a car park for up to 10 cars. I was thinking I could build a ground floor for the back offices, losing 5 spaces but gaining another office.
    Would you get planning permission to do this, as you would lose parking spaces?

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      #3
      Yes, that should not be a problem as there is business permit parking behind and it's by a tube too.

      Comment


        #4
        Difficult to value a property just on the info you gave, I mean an accurate valuation, and it may be worth using a professional surveyor for that, specialised in commercial property.
        Still, based on the description and yield from rent, I would put a £ 2-2.5 Mio, given also the planning/further development potential.
        I would not rush to sell, still you could investigate and sound the opportunity.
        To develop yourself, I would be very cautious for a number of reason.

        Comment


          #5
          Thanks LondonSW. Very very helpful this building was really meant for my retirement money as at the moment mortgage and interest and taxes paying off mortgage is not really making me much,

          I was only considering selling as was offered by that chap (verbally to start with and out of his head and yes I know that's not a real offer yet) 3.5-4 mil, which would change my lifestyle forever, hence I am now thinking about all options including development as I never considered the value of wha I'm sitting on.

          I know you say be cautious with development but what's your reasoning? With commercial, how can you do anything wrong if the costs are far less then the value created or extra rent achieved?

          Comment


            #6
            Doz, I will revert later during the day/night with some initial points.

            Comment


              #7
              Dozwold,

              It seems an attractive offer, difficult to judge, still. When you say four large office, you mean 2,000 sft each, each floor?
              That means, that is extended one more floor, if each floor divided in two flats, plus rear, could be achieved 9 flats, plus two shop?
              If you develop further you would try to develop residential that has more value of office/B1.
              May/2013 to May/2016 and now extended to May/2019, under permitted development make very easy conversion of office B1 into residential C3 etc
              When I said that you need to be caution, it is because there are a number of things to consider.
              First you have a commercial/BTL mortgage, that would restrict you from doing any Develoment and structural work on the building that has a first charge from the bank, and same for the insurance and if you do not have development experience they may decline the permission.
              The same to get Develoment finance, if you need any, since again unless you prove you have development experience, you would find hard to get any etc.
              Said that anything is possible, but do not rush, talk with people and start to shape some idea on the regard.
              £ 3.5-4.0 even with the potential are really good money, still, we would need to understand price per sqf fir commercial and residential in your area.
              How long have you had the property for? How much debt left? In your personal name? A lot of variable to consider.

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