westernsydney 201011 investment property valuation sale of a commercial property in sydney

Question:
This assignment aims to test students ability to:
Understand the property industry and its role in the investment context.
Research the property markets and sub-markets.
Identify and evaluate the role of Government and its effect on Property Decision Making
Develop an understanding of the various inherent, external and statutory controls on property development
Details
The commercial property market is one of the major sectors in the Australian property market. The market value of commercial properties is dependent on the sale of similar properties. The following is a sale of a commercial property in Sydney reported in December 2019.
A Darlinghurst office property on the fringe of Sydney city has sold for S92.75 million in a deal negotiated by CBRE’s Harry George, in conjunction with Tom Speakman and Matt Davoren Mercer Property.
Melbourne private investor Marks Henderson has expanded Its Sydney portfolio with a high profile $9275 million office acquisition in Darlinghurst.
Mercer Property’s Tom Speakman and Matt Davoren teamed with CBRE’s Harry George to negotiate the sale of 19A Boundary Street on behalf of fund manager Haben Property Group.
The sale was struck at an initial yield of 4.7 per cent and a build rate of 814.300/square metre.
At a glance:

An office property at 19A Boundary Street, Darlinghurst has sold for $92.75 million to Marks Henderson in a deal negotiated by CBRE’s Harry George, in conjunction with Tom Speakman and Matt Davoren from Mercer Property.
The sale price represents an initial yield of 4.7 per cent and a build rate of $14,300/square metre.
The fully leased Boundary Street building offers a total lettable area of 6.480 square metres and is home to notable tenants such as creative agency Collider and celebrity chef Donna Hay.
Based on the above sale information, prepare a report to verify if the reported sale price and yield are justified by the market evidence. Also, verify by market evidence if the rent rate is reasonable. This report requires you to apply knowledge in relation to:
1. Understand the property industry and its role in the investment context. research the property markets and sub-markets.
2. Identify and evaluate the role of Government and its effect on Property Decision Making. In this regard, it means you need to provide information on town planning, land tax and council rate, etc. in the report.
3.Develop an understanding of the various inherent, external and statutory controls on property development. In this regard, you need to comment if the property has complied with building regulations and planning control.

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