ABSTRACT
Capital value is determined by a number of factors: the present and prospective income; the return which the market determines to be appropriate to the particular investment; the strength of the tenant’s covenant; and the lease terms and the tenure of the property. It is therefore appropriate that in seeking to analyse real property transactions involving similar properties to the one to be valued, particular attention should be paid to these determinants. They are independent of each other but at the same time intricately interwoven; interpretation is often extremely difficult, involving aspects of judgement and experience. The determinants referred to above will now be considered. A more complete discussion will be undertaken in Chapter 8.
