The sale analysis "commercial (VNSW)" panel

Details and assumptions

This panel contains a number of editable fields that allow the valuer to describe the analysis and the assumptions that are being made by the valuer:

Field	Description
VG land value average for past 3 years	Autopopulated with the average of the last three years' land values but you can update it. If three years are not available, it will be the average of the land values that are available. The button at the end of the input field allows you to have the system recalculate the values.
Rating year VG land value	Autopopulated with the last rating year's land value but you can update it. The button at the end of the input field allows you to have the system recalculate the values.
Design & documentation period (months)	The number of months budgeted for design and documentation.
Construction period (months)	The number of months budgeted for construction.
Total project period (months)	The total number of months budgeted for the project. This is a read-only field.
Professional fees	Professional fees are calculated by applying this rate as a percentage to the total cost of improvements (below). This is autopopulated with 12.5% but you can update it. Do not type the percent sign (%) into this field.
Contingency	Contingency fees are calculated by applying this rate as a percentage to the sum of total cost of improvements (below) and the professional fees. This is autopopulated with 5% but you can update it. Do not type the percent sign (%) into this field.
Depreciation	Depreciation is calculated as the sum of the total cost of improvements plus the professional fees plus the contingency, all multiplied by the rate of depreciation. Do not type the percent sign (%) into this field.
Interest rate	Contains the interest rate used when determining the funding costs. Do not type the percent sign (%) into this field.

Sale price

This field is autopopulated with the sale price, but you can update it.

Added value of leases

Enter a description of the area under lease, along with area, the rate, and the length of the lease. The Value column will contain the product of Qty × Rate × Months ÷ 12. You can enter a value as long as the system is not able to calculate the value.

Replacement cost of improvements

Enter a description of improvement into the table, along with area and the rate. The Value column will contain the product of Qty × Rate. You can enter a value as long as the system is not able to calculate the value.

Field	Description
Professional fees	Total value of improvements × the professional fees rate.
Contingency	(Total value of improvements + professional fees) × contingency rate.
Replacement cost of new building	Total value of improvements + professional fees + contingency.
Depreciation	Replacement cost of new building × depreciation rate.
Depreciated added value of improvements	Replacement cost of new building - depreciation.

All these fields are read-only.

Development fees

Field	Description
Section 7.12 Fixed Development Consent Levy	If the depreciated AVOI is greater than $200,000 then 1% of the depreciated AVOI. Otherwise, if the depreciated AVOI is greater than 100,000, then 0.5% of the depreciated AVOI.
NSW Long Service Levy (Building & Construction)	If the replacement cost of the new building is greater than or equal to $2,500,000 then 0.25% of the depreciated AVOI.

Both of these fields are read-only.

Rates and taxes

Field	Description
Council rates (for whole project period)	Rating year VG land value × council rate percentage × total project period ÷ 12.
Land tax (for whole project period)	This is complex, so we're diving into some mathematics. The land tax is determined to be: IF threeYearAverageLv > 6,571,000 THEN 88,036 + (0.02 × (threeYearAverageLv – 6,571,000)) × (projectPeriod ÷ 12) ELSE IF threeYearAverageLv > 1,075,000 THEN 100 + (0.016 × (threeYearAverageLv – 1,075,000)) × (projectPeriod ÷ 12) ELSE 0 The read-only percentage field shows the land tax rate per annum (annual land tax payable ÷ the three year average land value.

Funding costs

Each of these calculations use Excel's FV formula.

Field	Description
Construction costs (half construction period)	-FV(interest rate ÷ 12, construction months ÷ 2, 0, depreciated AVOI + total development fees, 0) - depreciated AVOI + total development fees.
Rates & taxes (whole construction period)	-FV(interest rate ÷ 12, total project period, 0, total rates & taxes, 0) - total rates & taxes.
Land (whole construction period)	This is complex, so we're diving into some mathematics. The funding costs for the land is determined in this fashion: Interest% = -FV(interest rate ÷ 12, total project period, 0, 1, 0) - 1. Then land (whole construction period) = (balance after rates and taxes - (half period construction costs + whole period rates and taxes)) ÷ (1 + interest%) * interest%.

Residual land value

Field	Description
Residual land value after rounding (excl sale adjustments)	The total value from the above table, rounded according to VNSW rounding rules.
Total added value of improvements	Price - residual LV after rounding.
Rate per square metre of site area	Residual LV after rounding ÷ area (m²).
Rate per square metre of maximum GFA	Residual LV after rounding ÷ FSA (6A(1)). Only visible if the property's gross floor area can be determined.