To those who are not in the industry, a property valuation report might not sound like the most exciting thing. But without one, getting a loan or mortgage becomes a lot more difficult, especially if you are looking to buy a commercial property.
This was shown to be the case in a recent job our valuation team carried out.
The property in question was a pub located in the suburb of Birmingham. The client, a bridging lender, had been approached by the leaseholder for a bridging loan so that they could buy the property from the freeholder.
The pub is situated on a large parcel of land and had the potential to be extended or have additional structures added to it. As a lessee, there had been very little incentive to for them to spend money on the building or to build the possible ancillary structures, as the freeholder ultimately would have retained control of the assets.
Experts with industry and local market knowledge
The bridging lender, who has been one of our clients for around five years, knew that our valuations team would be ideally suited for the job. With our coverage of both the geographical area and a wide variety of specialisations, they knew that we have both the capacity and experience to carry out valuations of this kind.
Having knowledge of a particular location and industry is important as valuations need to take regional market variances into account. This includes having a good grasp of pressures that certain industry sectors may be under at the time of valuation.
In this instance, while the valuation took place in early 2022 – when the UK was technically deemed post-Covid – our valuation team needed to incorporate the impact the pandemic had on the hospitality sector and the industry as a whole.
This sector knowledge enabled our valuers to include relevant commentary in their final report, which also included comparisons against other, related property sales during a time when the market was potentially compromised and pubs were being sold because they could not trade during the Covid lockdowns.
Commentary of this kind is invaluable to investors and lenders, as their credit teams are unlikely to ever see the properties being valued. If the properties are not described properly, or potential pitfalls have not been highlighted, it would severely impact their ability to make a sound financial judgement.
In this instance, the AWH team were not only able to provide commentary on the general condition of the building, but also the condition of the local market and the potential the spare land had for additional uses. This all underpinned the attractiveness of the asset from a banking perspective and helped the purchase to proceed successfully.
A trusted valuation partner
Investors, bridging lenders and other banking organisations often like to use the same valuation partners across regions and asset classes as they get to know and trust the assessment of the valuer and their expert commentary. We are delighted to have built this kind of relationship with this and many other clients over the years.
Find out more about the work we do! Read our case studies.