Kevin Atkins, valuation surveyor at Arnolds Keys, speaks about valuing diverse property portfolios.
Portfolio valuations are an important part of managing any commercial property investment, but with investors turning to increasingly diverse types of property, obtaining appropriate advice is key to maximising returns on the portfolio.
Valuations are often carried out on behalf of a lender, either as part of a financing review or because the investor is seeking to use their existing portfolio as security to raise more finance to expand it or to maximise its potential.
They should also be a regular part of managing a property-based pension fund; or an investor may just want to benchmark their portfolio against the market.
There is a trend towards diversification in property investment in recent years. Partly this has been driven by buy-to-let residential investors wanting to spread their risks against a background of increasing regulation and less benign tax treatment on their residential portfolio.
But there are positive reasons as well: investors are increasingly drawn to commercial, and especially industrial, property because of the attractive returns over the past five years.
Meanwhile, sectors such as holiday lets have also come into play following the ‘staycation’ trend.
This poses an issue when it comes to valuing the whole portfolio. Single-sector investments require a valuer with in-depth knowledge of that market; multi-sector portfolios need a much broader expertise to ensure accurate valuations.
For example, residential valuers are generally excellent at valuing residential properties, however, they may not have the knowledge or experience of factors influencing value in other commercial sectors, such as offices or agricultural property.
Very recently I have carried out a portfolio valuation on behalf of an institutional lender, whose client is seeking to raise finance to unlock the development potential of their existing portfolio. This included two commercial assets, two barns that had been converted into holiday lets, and five unconverted agricultural barns that the investor wants to develop.
Clearly doing this requires knowledge of multiple sectors; I was fortunate to be able to draw on Arnolds Keys’ specialist teams in all the relevant areas as a multidisciplinary practice.
With a changing economic backdrop, it is increasingly vital to obtain a portfolio valuation from a firm that can offer expertise in every sector of property to identify risks and opportunities for the investor.
For more information, visit arnoldskeys.com
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article