PROPERTY 211 Property Valuation Assignment Brief S2, 2025 | Auckland

PROPERTY 211 Assignment Details:

General Instruction

Grafton,  a  Commercial  Lending  Manager  of  Future  Bank  Limited,  7  Queens  Road, Auckland,  has  requested  you  to  assess  the  current  market  value  for  first  mortgage security purposes of 3-9 Westfield Place, Mt Wellington, Auckland.

Please note that there will be no internal inspection of the property. However, an external inspection may be completed from the road side or through google map (if necessary). Under no circumstances are you to enter the property. Whilst this departs from the latest International  Valuation  Standards  whereby  it states  that  all  properties  must be fully inspected, we have been granted a departure from the above-mentioned valuation standard in this instance.

For  internal  description  and  measurement  of  the  property,  please  rely  solely  on  the photographs and information  provided  in the  improvements report as well as other information you are able to research online. Additionally, you have been provided with the following documentation: 

1. Deed of Lease 
2. Computer Freehold Register
3. Market Rents and Sales Evidence

Please  note  that  all  tenancy  information  in  the  deed  of  lease  has  been  changed  for confidentiality  reasons, while some of the physical features  of the building  have been altered  for  simplicity  purposes.

The  effective  date  of  valuation  is  to  be  July  1,  2025, which is also assumed to be the date of inspection.

Content of Technical Analysis

Working individually, you are expected to undertake all relevant independent technical analysis to show Mr Grafton that you have a full understanding of the task at hand. This technical analysis must be undertaken on a single Excel file, including the following:

The  comparable  analysis  consists  of  the  Rental  and  Sales  Analysis.  You  are required to choose five comparables from the market evidence information provided in this assignment and make justifications for the chosen comps.

Rentals  Analysis –  Read  relevant  information  on  all  comparable  rental  lettings provided, prepare a comparable rental table (qualitative and quantitative) of net rents, adjust for time, location, quality, size, etc., and apply adjustments back to the subject building to estimate appropriate market rent.

Sales Analysis – Read relevant information provided on all comparable sales evidence provided and prepare a yield comparison table (qualitative and quantitative), adjusting for time, location, tenant covenant and other adjustments you believe are relevant to derive the appropriate market yield for the subject building.

Valuation Analysis – Apply the two (2) investment valuation approaches detailed below to  assess  the  market  value  of  the  subject  property.  Please  ensure  you  only  use  the evidence and information supplied within this assignment  brief and the improvements report.

Capitalisation  Approach  – Establish  current  contract  and  market  rentals  for  each component  of  the  property  based  upon  the  market  evidence  provided  and  make appropriate rental surplus/shortfall adjustments between contract and market rentals. Capitalise at an appropriate Capitalisation Rate or Yield (derived from the sales provided and adjusting for relevant factors).

Discounted  Cash  Flow  Approach  – Prepare  discounted  cash  flow  based  on  a  10-year investment horizon / holding period. Use annual net contract rental cash flows (beginning of period payments). Ensure that cash flows are adjusted to reflect rent reviews where appropriate.

Internal Rate of Return (IRR) – Please  calculate  the  internal  rate  of  return  based  on your  concluded  assessment  of  market  value  of  the property  (being  the  weighted outcome of the DCF and Direct Capitalisation Approaches). 

Assumptions

• The total operating expenses for the property are estimated to be approximately $178,000 per annum, including rates.
• Outgoings have been forecast to remain the same over the investment horizon considered by the DCF.
• Upon inspection, the building was well presented, commensurate with its age. No items of deferred maintenance were noticed requiring allowance for any specific capital expenditure within your valuation. However,  you will need to allow for a general level of capital expenditure equivalent to $8,650 per annum and $100 per  square  metre  for refurbishment  works  over  the  offices  upon  each  lease expiry. 

Please  make  and  state  your  assumptions  with  justifications,  if  not  already  clearly provided in this brief. 

You have been provided with an examplar. Please note that the exemplar provided for your  current  assignment  is  intended  as  a  general  guide  only.  It  is  not  a  perfect  or prescriptive template that must be followed precisely. Base your analysis, adjustments, and calculations primarily  on  the  information,  figures,  and  context  provided  in your assignment brief. Do not force your work to match the exemplar if your data suggests a different approach. Use the exemplar for inspiration and broad guidance, NOT as a rigid checklist. Your grade depends on how well you apply your understanding of the comparison and investment valuation approaches.  

PROPERTY 211 Assessment Criteria: 

The  overall  assignment  comprises  30%  of  your  Prop  211  grade.  The  following assessment criteria and associated grading will apply to the assignment: