The Property is held in a pension fund and had undergone work to renovate the offering since its purchase. The property needed to have its valuation reassessed for the Pension Fund to establish whether the fund has appropriate assets to cover its accrued liabilities.
These valuations are required by the Statutory Funding Objective which sets out provisions to all benefit schemes and necessitates revaluation every 3 years.
The property was located within Dorset on the South Coast in a tourist destination town, in close proximity to beaches and the town centre.
The Pension Client wanted to release some equity from the fund, to allow for purchase and renovation of a new property.
We undertook the valuation, which required careful analysis due to the unusual offering, with the property having a guest kitchen/diner without any catered services. The property also lets per room, per floor or as entire building and the guest kitchen can therefore be a shared facility with multiple guests. This is quite different to what is generally seen in the market with most guest houses providing a catered breakfast with some, offering provision for evening meals.
We undertook a Red Book Valuation of the Guest House on an investment basis, based on the current lease in place, allowing for passing rent until next rent review and then with the rent increasing to Market Rent in perpetuity at a yield in line with the investment comparable evidence. We also valued on a Vacant Possession basis utilising rates per room in line with the Vacant Possession comparable evidence.
Our experienced team is ready to assist with unparalleled regional advice.
