a. The freehold of a shop (44 High Street) in regional town has an area of 120 square metres measured in terms of zone A (ITZA). It has just been sold for £1.5 million. The property is let on a new lease at £720 per square metre ITZA. Analyse this transaction to find the All Risk Yield. (6 marks)

b. Use this information to value a nearby shop (48 High Street) unit in a very comparable location but with an area of 100 sq. m measured in terms of Zone A (ITZA). The property is let at a rent of £780 per square metre ITZA on a lease with 7 years left to run and a rent review to Market Rent due in 2 years. Annotate and explain all aspects of your calculation. (22 marks)

c. Explain the concept of zoning as used in this question. Use a diagram to show how it is calculated with specific reference to shop units that might have two frontages. Further, why might its use be regarded as ‘outdated’? (5 marks)

Answer rating: 100% (QA)

ANSWER You tend to use the specific measurement form called Zoning when calculating the rental value ... View the full answer