PBL064 - Tenanted Office Block, Somerset DEFAULT

Hopefully a safe way around.

Look at this link  thefarmingforum.co.uk/index.php

And type in the search the name of the freehold property.

Erm - according to the relevant box in the valuation its expired ... yesterday

Surely savingstream should only ensure that the indemnity insurance is in place for the full duration of the loan 😡

The valuation is not worth the paper it's written on, as per pbl20. And the surveyors indemnity insurance is worth about the same.

My understanding is that all RICS members are required to maintain 'run off' professional indemnity insurance cover for 6 years after last doing work.

It's not the best valuation report IMO.

I'm a bit concerned.

It's described in the report as 'modern office premises' which then slightly contradicts itself by stating 'comprising workshop space with associated offices ..' .

But it looks and sounds like an industrial building with ancillary office space that may have been valued on an office basis to enhance the valuation. Steel portal frame , metal sheet roof, roller shutter door etc.... That's industrial build spec. And the PP was for an Industrial unit (section 3.3 of report).

Also, the valuer notes that one part looks way over-rented (section 5.1) - sounds dodgy. I find it hard to believe that was a proper arms length letting at market rent and that rent was actually being paid. It looks like a false rent intended to artificially (on paper) inflate the market value of the freehold.

A quick persusal of the floor areas , shows it's predominantly workshop...

workshop 1 - 133 sq m, workshop 2 - 35 sq m, workshop 3 - 251 sq m, workshop 4 - 69 sq m, workshop 5 - 203 sq m, workshop 6 - 337 sq m, workshop 7 - 202 sq m, warehouse with roller shutter door - 66 sq m. etc etc.

Industrial space values per sq m are going to be much lower than purpose built office values - which seem to have been used as 'comparables'.

And once again, of concern to me that it appears the borrower was able to choose the valuer (whose website suggests they specialise in the farming industry) and the valuation was accepted on the basis of information provided by the borrower.

It all seems a bit dodgy to me.
 

Going to be a little controversial and say I'm quite happy with this loan. SS have a 1st legal charge and debenture over the Co. all registered at CH. It is only the projected valuation which is causing people concern here. The owner is selling - which they won't be able to do unless they receive enough sale proceeds (or alternatively pay themselves on top of the sale proceeds) to pay back SS, and in turn us. Likely there is already a tenant on a lease at the Property if there is only part being offered to let at the moment which will only make it more attractive for a purchaser. What a director may have or has done in the past does not imo affect the saleability nor value of a Property.

I believe that the valuers in this case are a well respected firm and hopefully,to protect their reputation, will further investigate the rental 'claims'.If they feel that they have been misled they must alert their professional body and the criminal agencies,who,despite multiple complaints,have to date failed to take any action.