VALUATION OF INDUSTRIAL

PROPERTIES.

Industrial properties are properties located in industrially zoned locations

They are involved in manufacturing and also include buildings used as storage facilities, repairs and
maintenance of vehicles, those housing plants and machinery ie warehouses and workshops.
Industrial properties are usually partitioned and are constructed of simple materials on roofs and have a
reinforced concrete floor . Generally they are constructed of at the lowest construction cost [rates].
In valuing industrial properties valuer should be able to distinguish between main industrial building and the
other structures built as part of industrial process such as car parks, offices etc
Exclude specialised buildings that might not be used b alternative occupier such structures include silos and
over head gantrios are usually left out of the valuation process.
Point structures such as inspection points and platform support plant and machinery are valuable and should
be included in the valuation
Very specialised industrial buildings like refineries, abattoirs, steel works, should be valued using the
 FACTORS TO CONSIDER WHEN
VALUING INDUSTRIAL SHOPS

NATURAL LIGHTING
The building should allow as much natural lighting as possible
This can be ensured through proper designs which allow windows to run down the sides of the building.
The roof can also be designated to allow natural lighting into the building

NATURAL VENTILATION
This is necessary to allow circulation of air in and out of the building to bring out heat. Windows provide
such functions but can also be complemented by large door ways or ventilated gaps in the roof and walls
 FACTORS CONTINUED

FLOORS
industrial processes require floors that allow heavy machinery to be installed. The floor loading
capacity should be as high as possible.
This can be archived by reinforcing it with steel. Thin flows are easily damaged by industrial
processes.
FLOOR TO ROOF CLEARENCE
It should be at least 4-5m high. A good floor to roof clearance allows plants and machinery to be
accommodated
It also allows for storage of goods vertically and allows for batter movement within the premise
 LESSON 2 INDUSTRIAL
PROPERTIES

The best method in a functioning economy is the comparison method.

Where there are no comparables especially in specialized buildings the use
the contractor method
When comparing industrial properties look for the following features for
comparison
 FEATURES FOR COMPARISON

FLOORS
industrial processes require floors that allow heavy machinery to be installed. The floor loading
capacity should be as high as possible.
This can be archived by reinforcing it with steel. Thin flows are easily damaged by industrial
processes.
FLOOR TO ROOF CLEARENCE
It should be at least 4-5m high. A good floor to roof clearance allows plants and machinery to be
accommodated
It also allows for storage of goods vertically and allows for batter movement within the premise
LOADING FACILITIES
All factories should have loading bays to allow loading and offloading of goods. A good loading bay should
be raised so that it allows easy loading and offloading.
Ideally factories should have 2 loading bays one for receiving and another for dispatch

YARD SPACE
This is an important factory factor. A good yard space allows for easy circulation of vehicles and allow for
parking of vehicles. The same space can also be used for storage of raw materials and finished products

WASTE DISPOSAL
factories should have means to dispose their waste generated at the factory.
Waste products such as chemicals and oils require specialised removal systems. Some toxic and inflammable
waste might also require special disposal method.
Accumulation of waste give industrial properties adverse visual appearance and this has a bearing on its
value

POWER
Plants and machinery in the industrial area need high voltage electric power .
Industry require 3 phase power for it to power the heavy machinery.
Ideally all industrial properties should be powered by 132kv power supply.
Some industrial processes might need a substation to be built and this should usually come with the right
transformer, cabling and switch gear

Industrial properties should also have ablution facilities and offices . 15-20% of the space should be offices.
 THE VALUATION PROCESS

Valuation can be done through market analysis to find

comparable so that we can arrive at the value of the
property.
MARKET ANALYSIS CAN GENERALLY BE DONE
USING TWO METHODS WHICH ARE :
1. The overall method
2. Differential method
 OVERALL METHOD

o This method calculate the areas of the premise [ which is total area covered by
industrial property which include the factory, offices and toilets.
o We then divide the agreed rentals by the total area to find an average rate per square
meter.
o These rates are analysed to find which one closely relate to the premise in
question.
o The agreed rates are applied to the property in question to get the rental that can be
charged on the property
 DIFFERENTIAL METHOD

This is another method of valuation of industries where different space clusters are
treated differently e.g office space, workshop, ablution , warehouse etc.
you then need to find comparable for different clusters eg factory space, office space
and that of ablution facilities.
so rates from comparable are applied differently on different clusters
The total is added to get the total rentals payable for the premises
If you get one comparable it can lead to other values because it is principally agreed
that office space is 25-30% more valuable than production space and storage space.