In January 2025, Parkinson Real Estate were instructed by a commercial lender to provide valuation advice on a former place of worship that had been converted and adapted to a multi-unit residential investment asset. The property is situated within a peripheral town centre location to the East Lancashire market town of Accrington.
The valuation was required to underwrite a secured lending application to a third-party borrower. The borrower was seeking to refinance the completed apartments to a term mortgage, whilst also completing the final stages of the development, which would include the creation of a penthouse apartment for use as their own private residence.
Our approach
Upon receipt of formal instructions from our client, Rob Greenwood from our valuation advisory team attended the site and conducted a full inspection on both an internal and external basis. The property was a large multi-storey building that provided nearly 24,000 sqft of floor space and as such, an extensive site inspection was undertaken to ensure detailed floor plans and measurements were recorded.
In its entirety, the property had been converted to create 12 no. self-contained apartments and 1 no. 4-bedroom HMO (House in Multiple Occupation). Of the 16 no. units, 14 no. were complete and occupied, whilst 2 no. units remained under development.
The property is a unique asset, of which there are few competing properties in the locality, and this is primarily attributable to the level of specification that has been installed throughout. The fit-out of the apartments has been completed to appeal to the “upper-end” of the residential market to include high-quality decoration and high-end kitchen and bathroom fitments, and integrated appliances.
In addition to the level of fit-out installed within each individual apartment, occupants also have access to a private swimming pool, a gymnasium and an external BBQ terrace.
The luxury commodities associated with the apartments are more akin to Manchester city centre living as opposed to suburban Lancashire.
In formulating our opinion of Market Value, we implemented a hybrid of valuation approaches to reflect the differing occupational and development positions throughout the subject. In respect of the “completed” elements, we adopted the investment method of valuation to reflect that these elements were occupied and income producing at the date of valuation. In doing so, we appraised the occupational agreements, before conducting a thorough analysis of local and regional market transactions and compiling a hierarchy of comparable evidence. The valuation process involved making use of our local knowledge before combining this with a valuation calculation utilising contemporary valuation investment software.
In respect of the incomplete elements of the property, given the uniqueness of the asset, we were unable to undertake a conventional residual valuation. Not only did the Borrower not have an estimated cost of completion but given the high-end and luxurious specification to be installed to the remaining apartments, we were unable to rely upon the BCIS cost manual to calculate our own opinion of costs to complete the development.
Therefore, in allocating value to this aspect of this site, we adopted the market method of valuation. There were few comparable properties in the area with regards to condition, size and configuration and we therefore drew transactional evidence from differing property types that were suitable for redevelopment before making appropriate capital adjustments to reflect usage, quality, location and size. This process allowed us to derive an appropriate capital rate, which was then applied to the floor area of the incomplete units. It was important to reflect, most accurately and realistically, the process the majority of developers would utilise to calculate their offered price.
Given the unique nature of the asset, a specialist valuation knowledge of the sector and locality was required to ensure every aspect of valuation was considered.
Benefits
The client was able to have greater certainty, reliability and confidence with our report due to the robustness of the data, methodology and advice contained therein.
The report provided a breakdown of value for the overall property together with a Market Rent and an Insurance Reinstatement Estimate.
Testimony
Following completion of the instruction, we received the following feedback from the Borrower.
“I've been sent a copy of your report & I will very honestly tell you Mr Greenwood, in the 30+ years I've been looking at valuations/surveys I've never seen a more accurate/detailed report! How you managed to record & then so accurately detail this 100+ page report from the two hours or so you were onsite really is mind blowing”.
If you are seeking valuation advice throughout the Lancashire region, please contact Rob Greenwood on 07960 612765 or email rob.greenwood@parkinsonre.com
