A RICS commercial property valuation is an independent opinion of the value of a commercial property, prepared for an agreed purpose such as secured lending, buying or selling, financial reporting, tax or investment decisions. Sterlingworth values offices, retail, industrial, mixed-use property and development land, using market evidence and the valuation method that suits the property.
Sterlingworth Surveyors is a RICS-regulated firm (Firm Registration Number 850747) based in Chessington. Every commercial valuation starts by agreeing the purpose, the basis of value and the valuation date in writing, because those three points shape everything that follows.
You need one whenever a decision, a lender, an auditor or a tax return depends on a supportable figure for a commercial property. The purpose matters, because it decides the basis of value, the assumptions and who can rely on the report.
Arrange the valuation before the decision point, not after it, so there is time to gather the leases and other information the valuer needs.
Only if the lender agrees to rely on it. Most lenders instruct valuers from their own approved panel and set their own requirements, and a report prepared for you will not usually be accepted for lending unless the lender instructs it or agrees in advance. Speak to your lender first; we can then confirm whether we can act for them.
Looking for a house or flat? Home valuations are a separate service: see our residential property valuations.
We value single commercial properties and portfolios, whether owner-occupied, vacant or let.
Single-occupancy and multi-let offices, assessed with regard to location, specification, lease terms, rental income and occupier demand.
High street shops, shopping centres and retail parks, taking into account trading position, tenant mix, lease structure and investment yields.
Industrial estates, warehouses and logistics units, assessed on size, eaves height and specification, access, and occupier demand.
Buildings combining commercial and residential space, valued with regard to each income stream, the lease terms and the building as a whole.
Land and buildings with development potential, with or without planning permission. Sites are usually valued using a residual valuation, which works back from the value of the completed scheme.
A commercial valuer chooses the method that best reflects how buyers in the market price that type of property, and often checks the result against a second method. The four main methods are comparison with similar transactions, capitalising the rental income, valuing on the property’s trading potential, and working back from a development’s end value.
| Method | In plain English | Typically used for |
|---|---|---|
| Comparable method | Analyses recent sales and lettings of similar properties and adjusts for differences in size, location, condition and terms | Owner-occupied offices, shops and industrial units where there is good market evidence |
| Investment (income) method | Values the rent the property produces, now and in future, by applying a yield that reflects the risk of that income | Let property bought as an investment |
| Profits method | Values the property by reference to the trade it can support, for a reasonably efficient operator | Trading property such as hotels, pubs and leisure uses |
| Residual method | Starts with the value of the completed development and deducts build costs, fees, finance and developer's profit to arrive at a land value | Development land and buildings with redevelopment potential |
For more on development sites, see our page on development and residual valuations.
For a let commercial property, the lease and the tenant are often worth as much attention as the building. Investors pay for secure, well-documented income, so the valuer reads every lease and assesses how reliable the rent is.
Related advice: our rent review surveyors advise on setting a new rent, and our dilapidations surveyors advise on repair obligations at the end of a lease.
You need a Red Book valuation when a lender, auditor, tax authority or other third party will rely on a formal written opinion of value. RICS Valuation – Global Standards (the Red Book) sets the rules RICS members follow for these valuations, covering the terms of engagement, the basis of value, the valuer’s independence and what the report must contain.
Formal written valuations are carried out by RICS Registered Valuers in accordance with RICS Valuation – Global Standards (the Red Book).
Yes, if it is prepared for that purpose. Tax valuations usually need the market value at a specific date set by the tax rules, which may be in the past, and HMRC can ask how the figure was reached, so the evidence has to be clear.
A CGT valuation may be needed where the market value at a particular date is used to calculate a gain, for example when a property is given away, transferred to a connected person, or when a historical value is required.
The Annual Tax on Enveloped Dwellings can apply to residential dwellings owned by a company or certain other entities. It depends on the value of each dwelling at dates set by the ATED rules, so a company that owns flats, including flats within a mixed-use building, may need a valuation of the residential part.
We provide the valuation; your accountant or tax adviser advises on the tax position.
The more complete the information at the start, the more reliable the valuation. We will usually ask for:
A valuation is not a survey of the building’s condition. If you are buying and need to know about defects, a commercial building survey covers that in detail.
A commercial valuation report sets out the value and the reasoning behind it, clearly enough for a lender, auditor or adviser to follow. It normally includes:
The fee depends on the property, the purpose of the valuation and the work involved. Tell us about the property and why you need the valuation, and we will confirm a fixed fee before you instruct us.
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It is a RICS valuer’s independent opinion of what a commercial property is worth on a stated basis, such as market value, at a stated date and for an agreed purpose. It is based on an inspection, the leases and other documents, and market evidence, and the report explains how the figure was reached.
Yes. For let property, the leases are central to the valuation. We look at the rent against market rent, the unexpired term and any breaks, rent reviews, repairing and service charge terms, and the strength of each tenant’s covenant, and reflect them in the yield applied to the income.
Yes. We value individual commercial properties and portfolios. For a portfolio, we agree at the outset whether you need a value for each property, for the portfolio as a whole, or both, as these can differ and the purpose of the valuation usually decides which is required.
Only if the lender instructs us or agrees in advance to rely on our report. Lenders normally use valuers from their own panel and set their own terms. Check with your lender before commissioning a valuation for a loan, and we can then confirm whether we are able to act.
Yes, provided it is prepared for that purpose. Financial reporting follows the basis of value required by the relevant accounting standards, and tax valuations, including Capital Gains Tax and ATED, use market value at a date set by the tax rules. Tell us the purpose at the start so the report meets it.
A valuation reflects the market at its valuation date, so it has no fixed shelf life. Its usefulness depends on how much the market or the property has changed since. Lenders and auditors often set their own limits on how recent a valuation must be.
No. A valuation gives an opinion of value and notes condition only as far as it affects that value. A commercial building survey examines the fabric of the building in detail and reports on defects and repairs. If you are buying, you may need both.
Yes, but through our separate residential valuation service, not this commercial valuation service. If your property is a house or flat, or you need a valuation for a residential purpose, please see our residential valuation pages or get in touch.
Tell us about the property, how it is let and why you need the valuation. We will confirm the scope, the basis of value and the fee before you instruct us.
You can also see all our commercial property services in one place.
