Commercial Valuations

Commercial Valuations

Herron Todd White provides independent Commercial Valuations backed by local expertise and national consistency.

Frequently Asked Questions

How is a commercial property valued?

Most commercial properties are valued using two main approaches. Income capitalisation converts the property's net income into a value, and direct comparison measures it against recent sales of similar properties. Your valuer chooses and weighs the approaches that best suit the property type and the purpose of the valuation.

Does the length of the lease affect the valuation?

Yes. A long lease to a financially strong tenant makes the income more secure, which usually means a lower capitalisation rate and a higher value. A short lease or a vacant building carries more risk, so buyers expect a higher return and the value is typically lower.

How are owner-occupied commercial properties valued?

We usually use two approaches and compare the results. The first estimates the rent the property would earn if leased at market rates, then converts that income into a value. The second compares the property with recent sales of similar buildings sold with vacant possession, meaning empty and ready to occupy. Your valuer weighs both to reach a final figure.

What is a going concern valuation?

A going concern valuation values a property together with the operating business it houses. It's typically used for childcare centres, aged care facilities, medical centres, hospitality venues, and service stations, where the value depends on how the business trades as well as on the property itself.

What information do you need to start a commercial valuation?

Usually a tenancy schedule, signed leases, a breakdown of outgoings, floor plans, and any planning approvals or contamination reports. The more complete the information you provide at the start, the sooner your valuer can deliver the report.

How much does a commercial valuation cost, and how long does it take?

Commercial valuations are individually quoted, because the fee and timing depend on the property's type, size, and complexity, and on the purpose of the valuation. Request a quote with the property address and what you need the valuation for, and we'll confirm both.

Can I use a commercial valuation for SMSF, tax, or financial reporting?

Yes, but the valuation needs to be prepared for that specific purpose. Tell us how you'll use it when you request a quote, so your report meets the relevant requirements, such as ATO or audit standards.