A valuer is assessing a mixed-use property with retail ground floor and residential apartments above. The retail component shows a 6% yield while comparable residential yields are 4.5%. How should this complexity be addressed in valuation?
Correct Answer
B) Apply separate capitalisation rates to each income stream
Mixed-use properties require separate analysis of each income component using appropriate capitalisation rates that reflect the risk and return characteristics of each use. This provides more accurate valuation than applying a single blended rate to the total income.
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A valuer is assessing a mixed-use development site where the highest and best use analysis indicates potential for either residential apartments (NPV $8.2M, 18-month development) or commercial offices (NPV $7.8M, 24-month development). Current zoning permits both uses. What valuation approach and conclusion is most appropriate?
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A valuer is assessing a unique architectural property with no recent comparable sales. The property cost $2.5 million to build five years ago, current construction costs have increased 15%, and the valuer estimates 8% total depreciation. What is the indicated value using the summation approach?