|
Income Assessment
In accessing a fair market for the retail units, we have had regard to the following:
The size and nature of the units providing for modern retail/office accommodation upon completion of building works. The units fronting High Street have limited complementary retail development surrounding and is considered to be less preferred location as that of the units fronting Plenty Road, which has frontage to be Safeway Supermarket.
Will form part of an extensive residential development.
|
|
|
Assessed Rental |
| Unit |
Orientation |
Area (m2) |
p.s.m.pa |
p.w |
per ann. |
| HC1.1 |
High Street |
140 |
$145 |
$385 |
$20,000 |
| HC1.2 |
High Street |
143 |
$145 |
$385 |
$20,000 |
| PC1.1 |
High Street |
197 |
$140 |
$520 |
$27,000 |
| PC1.2 |
High Street |
114 |
$155 |
$350 |
$18,000 |
We note at this time that in the event of a new lease being entered into, or in the event of a lessee renewing for a further term, the subject unit will fall under the provisions of the Retail Leases Act 2003 ("The Act"). Under the Act, land tax is no longer a recoverable outgoing from the lessee, and our assessment is on this basis.
Residential Component
To establish the rental value of the subject apartments upon completion, we have considered rentals forming part of new apartment projects with particular reference to developments within the inner northern suburbs. For reasons of locality, quality and design, we believe the apartments, particularly those within the more "affordable" price range and floor levels. Whilst it is well documented that the vacancy rate has increased throughout Melbourne particularly within the areas prolific in medium density development, we comments that the majority of concerns in this respect relate to high rise developments within the Central City Region, particularly the areas of Southbank, Docklands, the CDB and particular parts of St Kilda Road.
In relation to the subject development, we consider the apartments will meet with sound market acceptance if offered to the rental market, subject to realistic pricing structures. In the event of a notional tenancy under normal terms and conditions, specifically a 12 month lease with the lessor responsible for all usual outgoings, we advise the following approximate broad rental values:
- One Bedroom Apartments $200-$225 per week
- Two Bedroom Apartments $250-$275 per week
- Three Bedroom Apartments $325-$375 per week
The above rentals relate to broad indication only, with exact rental values for each apartment varying according to position within the building, aspect, optional study accommodation, carparking, and other issues such as lease terms and conditions.
The Broad rental estimates provided are based on the assumption that the apartments will not be offered with any rental guarantee or any other form of structured management agreement.
Capital Growth in Preston
|