brentwood.gov.uk

Object

Representation ID: 31067

Received: 09/11/2022

Respondent: BNP Paribas Real Estate/Strutt & Parker

Object to assumptions within the VA, where the following has not been sufficiently considered, and therefore require amendments to the VA:
- A 30% reduction in capital values in the industrial and logistics sector. Prime yields have shifted from 3.25% to 5.25% in a 3 month period. Far more significant is the impact on land values for industrial and logistics development which have generally reduced by 60% to 65% since June 2022. This is a consequence of not only the outward yield shift on the GDV but the compounding effect of considerable inflation on construction and infrastructure costs as well as higher finance rates and increased risk margins applied through all aspects of development appraisals.
- Revenue - The capital value per sq/m of £2,800 in terms of assumed rent and yield requires clarification.
- Project programme - It is unclear how the project programme has been tested.
- Buyers costs - The VA does not take into account Stamp Duty Land Tax, sales agent fees and sales legal fees.
- Construction costs - It is unclear which BCIS cost rate has been applied.
- The VA does not include all infrastructure costs for the site, which should be £116m.
- Contingency - a 5% contingency should be applied.
- Commercial letting and legal fees - Include a commercial letting and legal fees of 15% in the first year of rent for letting fees and 5% for legal fees.
- Finance - The finance rate of 6% should be increased to account for the recent base rate increase.