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| Client | John Smith |
| Instructing Party | Claymore Advisory for, Echidna Capital Pty Ltd as Trustee for the Echidna Mortgage Trust |
| Assessment Purpose | First mortgage security |
| Date of Instruction | Thursday, 12th July 2018 |
| Our Reference | 987654321 |
| Your Reference | 123456789 |
Overview
Market Value
With Vacant Possession
$1,000,000
Estimated Insurance Value
Insurance should be arranged
by the Body Corporate
Fee simple with vacant possession.
19 February 2018
20 February 2018
90 days from the date of valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.
We confirm that the valuer does not have any pecuniary interest that would conflict with the proper valuation of the property.
Andrew Ballard AAPI CPV
Regional Director
API No: 12345 WA Lic No: 67890
Inspecting Valuer
Claire Robinson AAPI CPV
Associate Director
API No: 98765 WA Lic No: 43210
Counter Signatory
Mortgage Considerations
No
Whilst the suitability of the property as security is the commercial prerogative of the lender, the subject property is considered to be suitable security for first mortgage security purposes, subject to the comments within this report.
Property Details
1 Farm Street Merewether NSW 2291
The Malaga industrial area is situated on the eastern side of Alexander Drive bound by Reid Highway to the south, Illawarra Crescent to the north, Weir Road to the east, north of Marshall Road, and the proposed Tonkin Highway extensions to the east, south of Marshall Road. The Malaga industrial area predominantly services the northern and north eastern corridors of the Perth metropolitan area.
More specifically, the subject property is located west of Cogla Street, east of Malaga Drive, south of Mulgul Road and north of Victoria Road.
Lot 9 Strata, Plan 34659, Volume 2139, Folio 846
Freehold
Trenclemente Nominees Pty Ltd
The property has a unit entitlement of 12 out of 100 in the Strata Plan, which is a 12 % share in the common property.
General Industrial - City of Swan
Town Planning Scheme No.3
Industrial - Metropolitan Region Scheme
Electricity, town water, sewerage, gas, and telephone services are connected.
Risk Overview
Cashflow Certainty
Are there significant concerns with the ability of the property to sustain the market net income over the next three years?
Lettability if Vacant
If vacant or owner occupied does the valuer reasonably believe the property may not be lettable within a six month period at the adopted market rent?
Saleability
Are there any attributes of the property which would significantly impact on its ability to be saleable at the assessed value level within a six month marketing period?
Market Volatility
Is the market for this asset likely to have an abnormally high degree of volatility?
Market Metrics
Current
HIGH
LOW
STEADY
LOW
Forecast
(12 Months)
HIGH
STEADY
STEADY
LOW
Total Stock (sqm)
Total Vacancy
Purchase Demand
Supply Additions (sqm)
Property Profile & Risk
Market
Reasonable — given non-specific improvements however somewhat offset by the lack of office component.
Experiencing low sales volumes and limited activity.
Softening
The market for similar properties in this location in the past has generally demonstrated moderate market volatility.
Estimated 3-6 months, assuming proper marketing and a realistic asking price. The estimated selling period is typical for this type of property in this location.
Owner occupier
$253,000 ($230,000 on an assumed GST exclusive basis) on 14 June 2005
The GST status of this sale is unknown
$400,000 (GST Status yet to be confirmed by vendor) on 29 January 2018.
In assessing the Market Value, we are aware that the property is currently under contract for $400,000 dated 29 January 2018.
Having sighted a copy of the contract we advise no detrimental conditions or restrictions are contained within the contract which would adversely impact on the assessed Market Value. Based on the most recent comparable sales evidence, the current contract price of $400,000 is considered to be in in line with market. 1
Asset
The highest and best use for the property is considered to be
The property is functional for the existing use.
Non-specialised asset
During our inspection we did not note any items requiring immediate capital expenditure, other than items which would normally be undertaken as part of an ongoing regular maintenance program..
Nil noted
Nil noted
Occupancy/Cashflow
The property is currently owner occupied, and in accordance with Valuation Standards our valuation for mortgage security purposes has been assessed on a vacant possession basis.
Leasing demand for properties similar to the subject is currently softening.
4-6 months (with incentives typically required).
Currently foreseeable factors which may impact specifically on the future value of the subject property include; Foreseeable increased supply of similar style property; Possible upward pressure on yields which (all other factors held constant) would have an adverse impact on value; Expected improvement in local economic conditions
Asset Management
The property is a standard asset class.
SWOT Analysis
Strengths
- Proximity to major arterial roads including Reid Highway and Alexander Drive
- Provision of on-site car parking
- Located within an established industrial locality
- Subject development has good exposure to vehicular passing traffic
- Non-specific improvements well suited to a variety of industrial uses
Weaknesses
- Internal unit within the development and
- Current soft economic conditionsand property market
Opportunities
- Rental income derivable through leasing the premises
- Provision of office accommodation
- Improvement in current economic conditions and/or property market/li>
Threats
- Development of competing premises leading to potentially extended clearance rates and competitive pricing conditions
- Downturn in the property market and/or economic climate
- Economic factors including interest rates
- Inherent property risks (including insurable and un-insurable risks)
Assumptions & Recommendations
- The instructions and information supplied contain a full disclosure of all information that is relevant
- All values expressed within this report are exclusive of GST unless otherwise noted.
- The Valuation is prepared based on the Assumptions Conditions and Limitations appended to the end of this Report.
- We have not sighted the Strata Company minutes or any bylaws/management statements. Our valuation assumes no onerous conditions special levies or major short term capital work items have been raised. Should there be any special levies raised or onerous conditions in by laws we recommend the matter be referred back to our company for further comment as to the likely impact if any on the market value.
- The GST status of the sale is yet to be decided upon by the parties. Our assessment is on a GST exclusive basis. The GST Annexure should be obtained.
- Contract of Sale (Signed and Dated)
- GST Annexure
Key Valuation Outputs
$1,493/sqm lettable area
$950/ha
$850/ha
$1,200/ha
Improvements
Improvements
Strata warehouse unit occupying an internal position within a ten (10) unit development
Single Storey, conventional
Clear span warehouse, kitchenette and two (2) unisex ablutions. Two (2) manual roller doors (being 3.7 metres wide x 4.4 metres high to the front and 3.7 metres wide x 3 metres to the rear). Truss Height: 5.3 metres minimum - 5.8 metres maximum.
The property provides a secured concrete open yard to the rear (60sqm). Common property in the development includes: bituminised access areas and standard landscaping.
Circa 1998
Building Services
Suspended metal halide high bay lamps
Standard Air Conditioning
Three Phase Power
Standard Fire Services
Nil Noted
Construction
Concrete Tilt Panel
Concrete
Aluminum
Metal Deck
Plaster Board
Condition
Good
Good
Nil
Nil
268 sqm
Environmental Issues
Online database searches with the Department of Fire & Emergency Service Bushfire Prone database do not suggest that the subject property is within a Bushfire Prone area.
Based on our site observations, current and past uses along with surrounding uses, contamination of the site is considered unlikely.
A search of this database revealed the subject property is currently not listed a contaminated site.
We have not been provided with an environmental audit, nor are we aware of the property being affected by soil contamination. We have not investigated the site beneath the surface or undertaken vegetation or soil sampling.
Market Evidence
Valuation Methodology & Conclusions
Adopted Valuation Approach — Market Approach
This valuation method is the most frequently used method and involves comparison of the property to be valued with sales of similar properties. Comparisons can be made in many forms including straight comparison, or analysis on a rate per area basis (such as rate psm, or rate per ha of land).
(Rate psqm Lettable Area)
Valuation Reconciliation & Conclusion
Having regard to the above calculations, and after taking into account both the positive and negative attributes of the property, from an objective and unbiased, yet balanced point of view, we are of the opinion that the Market Value of the property is $400,000.