UNDERSTAND THE LANGUAGE OF A COMMERCIAL VALUER 

A
Acquisition Costs
The total cost of acquiring an asset. This may include stamp duty, legal fees, building report, valuation fees, survey fees and any other due diligence costs directly related to the acquisition. Generally allowed for in a discounted cash flow approach, but not in a traditional capitalised income approach.

B
Base Rent
The minimum acceptable rental provided in a lease. In retail leases the base rent generally refers to the commencing rent which is supplemented with a ‘percentage rent’ based on the tenants turnover.

C
Carrying Amount
The amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses.

Certified Practising Valuer (CPV)
A designation of the Australian Property Institute signifying the recipient has the required education and experience to undertake comprehensive valuations

Covenant
An agreement between two or more parties to adhere to certain terms, conditions or restrictions regarding property, often written into a deed or other legal instrument such as a Certificate of Title.

D
Defect In Title
Where the title to real estate or documents relating to that title are found to be incorrect.

Determination (Rental)
A decision set down by an appointed independent valuer in which a disputed rent is decided, in circumstances where a lessor and lessee have been unable to negotiate an agreement, or deciding on a rent amount previously in dispute between valuers for the landlord and tenant or by a third party.

Direct Vacancy
Vacant area of buildings available for occupation directly from owner. This does not include sub-lease vacancy which is available from a tenant.

E
Easement
A right to use the land of another (not involving the taking of any part of the natural produce of that land, or any part of its soil) or a right to prevent the owner of that land from using that land in a particular manner. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property. Some form of compensation may be payable.

Economic Life
The total period of time over which an asset is expected to generate economic benefits for one or more users.

Effective Rent
The actual liability for rent and outgoings after adjustments for any incentives to the face rent are taken into account.

Equivalent Rent
Equivalent refers to the rent being adjusted for the effects of any market rent reviews that will occur in the period of consideration.

Equivalent Yield
The Equivalent Yield is an annualised yield that is derived from the current net income and future changes to the net income over time but no allowance is made for future rental growth. It is the rate of return of a net income stream over a specific period of time that reflects current actual rents and costs and current levels of rental values.

Existing Use Rights
Rights established under planning legislation that allow the continued lawful use of land or buildings following the introduction of a new planning scheme or controls.

Expert Valuer
In Australia - a person who is a Certified Practising Valuer of not less than 5 years’ standing, of the Australian Property Institute and was active in the relevant market at the time of the original valuation. In New Zealand a Registered Valuer of not less than 5 years’ standing, of the Property Institute New Zealand and was active in the relevant market at the time of the original valuation.

External Obsolescence
A loss of utility caused by economic or locational factors external to the assets that results in a loss of value.

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