Case Study Extracts
- In January 2012, Rushton International valued a 195 room Airport Hotel which had an insured value of around £19.8m. The outcome of our valuation showed that the client was over-insured as the accurate reported value was £17.7m.
- Following a change of ownership we were instructed in December 2011 to provide a reinstatement value for a bar and nightclub complex in the North-West of the UK. The previously insured cost per square meter of £2,120 was far greater than the BCIS mean cost for public houses and bars of £1,486 per square meter. Our valuation showed that the client was 44% over insured.
Real Estate Valuations:
The valuation methodology required in the Real Estate sector is generally interchangeable and scalable from property to property. Our reinstatement valuations are built up from sub-structure to super structure, relevant fit out (which can vary considerably) and site improvements. The Real Estate sector spans all building types and construction forms and the valuation methodology should alter to reflect this.
- Building costs have risen by 5% over the last 5 years however our valuations have shown that the reinstatement values for the hotel sector have in fact fallen by 9% over the same period. There has been a general failure to capture the fall in building costs of around 12% since the peak in late 2008 throughout the real estate sector.
- An increased focus on financial risk management places a growing emphasis on all aspects of the costs of property ownership and occupation. It is therefore even more important to ensure that sums insured are correct.
- Our experience frequently highlights that the Retail/Consumer Price Index figures are used instead of Building Cost Indices.
“Rushton International have been our valuation partner for some years now. They value our property portfolio for insurance purposes and we are very happy with the thorough and professional service they provide. We have found them to be excellent value for money and would readily recommend them.”
Richard Sheehan, Investment Director, Innisfree