Jump to content

Recommended Posts


Good question, and not an easy one to answer as it might first appear. Strictly speaking a leasehold value is not computed by a % of the Capital Value.

To be exact you must work out the sum of the Present Value of each future year's rent.

Take today's passing annual rental rate (using comparable information if you dont have it to hand), apply an assumed growth rate (using historical annual rental figures to establish a trend, comparable data, or the built-in rental escalations to annual rent if the lease is so structured). Then discount each year at a suitable rate depending on the risk profile for the property.

Using the Present Value Formula = 1 /(1+i)^n for each future year's rent.

Not too sure how helpful that is and forgive me if I don't go into exhaustive detail. Leasehold valuations are not my favourite subject.

They are complicated beasts and market practice by most landlords is horribly simplistic (sum / original years x how many years left) it really is not reflective of true market value and explaining time value of money to Thai landlords can be frustrating to say the least, so as always things end up being agreed via compromise and negotiation.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.








×
×
  • Create New...
""