10 May 23 by John Tyas
Valuation of Educational Premises
As with any properties, educational establishments often require valuations to be carried out, either this is for Asset Valuations, Charity Valuations, Loan Security or for other purposes. At Vickery Holman we have a team across the Southwest with Experience in valuations of this type which we are able to provide professional advice for these assets. We have experience working with Local Authorities, Charities, and other educational establishments
Case Study – College in Taunton
We were approached by a further education and sixth-form college in Taunton, Somerset who had recently transferred into a trust and for accounting purposes needed the freehold interest of the College valued. As this was for accordance in accordance with the International Financial Reporting Standards (IFRS) as applied to the United Kingdom Public Sector and interpreted by the current CIPFA Code of Practice for Local Authority Accounting (LAA)
We carried out an inspection of the buildings, taking a note of measurements, condition, age and reviewing the M&E provisions.
The buildings had generally been replaced with newer modern buildings over the past 20 years, although there are a few buildings from circa 1970s, some period buildings as well as a block of temporary classrooms, all of which are used for education or ancillary staff offices for which there is no open marketplace or comparable sales for existing use.
As large educational properties such as this aren’t generally sold in the open Market, unless for development, we looked at this on a Depreciated Replacement Costs (DRC) methodology which considers the value of the building in its current condition taking a brand new replacement and then allowing for the obsolescence of the existing buildings and site.
Reviewing BCIS build costs as well as considering Modern Equivalent Assets, we reached a construction cost for the property. We then considered the physical, functional, and environmental obsolescence of the buildings and adjusted the construction cost to reflect the Value of the buildings at the date of the Valuation. Finally we considered the value of the land on the site suing comparable land transactions before reporting the Values to the Client.
Having completed the report, we discussed the figures with both the client and their accountant who were happy with the work we produced. To talk to a RICS Registered Valuer in the South West, please talk to our Valuation team.