FACTOR AFFECTING PROPERTY VALUE, RENTAL VALUE AND LAND VALUE

• Any increase or decrease in population
• Changes in the age distribution of the population
• Changes in the proportion of married people to single people
• Changes in fashion and taste
• Change in the type of society
• Changes in technology
• Changes in building costs
• Money supply
• Location and accessibility
• Planning control
  
  * For residential properties, rental for accommodation is affected by:
• Location
• Design/Layout
• Built-up area
• Furnish or empty house
• Demand and supply factors
• Fashion and taste
• Accessibility
• Panoramic views and level of unit
• Economic situation
  
  * The factor(s) which affect the value of any one lot are divided into two categories:

1. External data, general data or neighbourhood data
2. Those inherent in the lot itself, or specific data.

1. External data, general data or neighbourhood data
   - The factors which lie beyond the bound of the lot, but which affect its value can be broadly grouped under four headings

a. Physical Considerations

b. Social Considerations

c. Economic Considerations

d. Government and legal Considerations

Allen Wong  Real Estate Negotiator

M +(60)14-981 3293 E allenwong@cbd.com.my W www.CBDJOHOR.com

CBD 房地产经纪有限公司

CBD Properties Sdn. Bhd.

62A, Jalan Sutera Tanjung 8/3, Taman Sutera Utama, 81300 Skudai, Johor.

T +(60) 7 556 1111 F +(60) 7 562 0988 W www.CBDJOHOR.com

2010 Highly Commended' Best Real Estate Agency Website Malaysia by Asia Pacific Property Awards in Association with Bloomberg Television

2011 '5 Star' Best Property Consultancy Marketing Malaysia by Asia Pacific Property Awards in Association with Bloomberg Television

2011 Residential Sales Person of the Year Award by MIEA'S National Real Estate Awards

2011 Real Estate Agent of the Year by MIEA'S National Real Estate Awards

DETERMINATION OF RENTAL VALUE

DETERMINATION OF RENTAL VALUE

• The rental value of a commercial property is the amount that a prospective tenant can afford to pay for its occupation. The tenant occupies the property for the purpose of making profit, so that the value of occupation to him will be dependent on what he can earn there. There may be instances where a property has a special value for a particular tenant; for example, the property is adjacent to premises which he already occupies and or owns.
• In the case of residential property, occupation is need and does not usually serve a profit-making function. In many cases, the rent will be established by statutory rent control, which will determine the maximum amount of the rent that may be charged at a particular time.
• If rent is dependent on profit, it will be affected by the economic state of the country and many of the characteristics of land and property as previously considered. The rack rental value of property may be calculated at a particular time in several ways:

1. By references to the rent currently paid.
   - This may be a reasonable guide but if (it) could be less than the rack rental value. It may have been fixed at a date of the past, and rental values have since increased due to inflationary trend
   - The rent paid, at the commencement of the lease, be less than the full rental value at the time. This may occur because there is a special relationship between the landlord and tenant such as father and son or the leaser is a parent company of the lessee.
   - Another reason may be that the tenant agrees to pay a capital sum, term as premium for the benefit of paying less rent than the rack rental value.
2. By comparison with similar property
   - If properties are owner occupied, vacant or held on long-established lease, then to determine their current rental values, it may be necessary to compare them with the general levels of similar properties in the same locality
   - The practical difficulty of this method is that no two properties are exactly the same, so that the value of the comparable property may have to be adjusted to take into account differences of age, location, condition and other matters.
   - The units of comparison will vary according to the type of land and property, for example, agricultural and building land may be compared per hectare (or acre) and residential, industrial and commercial property per square metre (or square foot) of the floor area.
3. By considering rent as a proportion of turnover or profit.
   - This method of calculating rack rental value is based in the requirements of the tenant. A prospective tenant of a commercial property will calculate his likely turnover, cost, an allowance for interest on capital employed in the business, salary and rates.
   - The balance will represent profit and he will then determine the proportion of this to be allocated for rent. Hence, prospective tenants may differ in the way that they calculate the rent that they are prepared to paid with resultant variations in the figures obtained.
4. By relating the rent to cost
   - Where the land has building erected upon it, the rent will consist of two elements. There will be an annual return for the use of the land itself, which will be dependent upon supply and demand. There will also be an annual repayment for the cost of the building, which should be an appropriate yield on the capital outlay.

Allen Wong  Real Estate Negotiator

M +(60)14-981 3293 E allenwong@cbd.com.my W www.CBDJOHOR.com

CBD 房地产经纪有限公司

CBD Properties Sdn. Bhd.

62A, Jalan Sutera Tanjung 8/3, Taman Sutera Utama, 81300 Skudai, Johor.

T +(60) 7 556 1111 F +(60) 7 562 0988 W www.CBDJOHOR.com

2010 Highly Commended' Best Real Estate Agency Website Malaysia by Asia Pacific Property Awards in Association with Bloomberg Television

2011 '5 Star' Best Property Consultancy Marketing Malaysia by Asia Pacific Property Awards in Association with Bloomberg Television

2011 Residential Sales Person of the Year Award by MIEA'S National Real Estate Awards

2011 Real Estate Agent of the Year by MIEA'S National Real Estate Awards