Commercial Property valuation

Hi all,

We are about to enter a lease agreement for a new business. All going well we would like to purchase the building in the coming years. I was wondering has anyone here any experience with valuing commercial properties? On the web there are rent based formulae but not sure how applicable these are for Ireland. Obviously, it's a bit difficult valuing anything related to property at the moment, but what would be considered rational ranges?

Thanks,
Firefly.

How about an agreement that the property will be offered to you for sale in X years at the then market value - that value to be set by taking the average value from three separate valuers? One valuer to be nominated by each of the parties and the third to be agreed by e.g. the two nominated valuers ?

mf

The way most values are done nowadays is based on the rental income or yield.10% upwards at present, but this figure could change in coming years.
You could agree a yield of x percent based on the CPI at the time you will purchase.
Yields are determined primarily by location and quality of tenants

Has the landlord given any indication that they want to sell it?

Most are happy being landlords.

if you are thinking of buying your own property after a few years, then you should get a break clause now or sign only a short lease.

You could ask for an option to buy it after a few years, but that is a bit messy. I have seen a case recently where someone thought that they had an option, but in fact they had an obligation and they had to compensate the landlord for not going through with it.

We haven't raised the possibility with the landlord as we were negotiating down the lease and didn't want to come across that we may have the funds. The lease is under 5 years so from a mobility perspective we are ok. The thing is though that the premises is ideal for what we are planning for it. From a tax perspective it probably makes sense for us to rent as we can deduct this as an expense, but we'd be happier to forego this and own the property outright so as not be to be dependant on anyone. Our plan is to see how it goes for the first two years or so and see where we are then. I like the earlier suggestions and it's something to consider. Thanks to all.