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In the Spotlight: Tadgh O’Brien

Tadgh O'BrienWhen we say Opteon valuers live and work in the regions they service regularly, we mean it.

Tadgh is an agribusiness/rural specialist and Certified Practising Valuer servicing central and western New South Wales. He undertakes a broad range of valuation types and asset classes throughout New South Wales with a focus on rural property.

Born and raised on a grazing property, Tadgh has worked on everything from pastoral grazing to more intensive broadacre irrigation and livestock backgrounding operations.

Based in the central west of New South Wales, he applies his lifetime of experience in agriculture and background in Agri-finance to valuations.  Having an understanding of both the lenders and farmers perspectives, coupled with his valuation qualifications, customers trust him to provide comprehensive agricultural valuation services.

Areas of Expertise

  • Mixed Farming Valuations
  • Broadacre Dryland & Irrigation Valuations
  • Rural Lifestyle Valuations
  • Valuations for mortgage security purposes
  • Valuations for pre-purchase/pre-sale advice purposes
  • Valuations for market value

Formal Qualifications

  • Associate Member of the Australian Property Institute (API Member No. 106439)
  • Certified Practising Valuer
  • Graduate Diploma of Property – Deakin University
  • Bachelor of Business – University of New England

DISCLAIMER

This material is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s valuers are qualified, experienced and certified to provide market value valuations of your property. Opteon does not provide accounting, specialist tax, investment or financial advice.
Liability limited by a scheme approved under Professional Standards Legislation.

In the Spotlight: Michael Simson

michael simson director residential developmentMichael Simson joined Opteon in August this year as Director – Residential Development.

Michael brings to Opteon a wealth of knowledge in the valuation industry, having worked as a property valuer specialising in the valuation of residential development projects across Brisbane.

Michael is an Associate of the Australian Property Institute, a Certified Practising Valuer and has completed a Bachelor of Applied Science (Property Economics) with distinction via the Queensland University of Technology – Brisbane.

Michael is accredited with Opteon as a specialist within the residential and mixed-use development sector.

Areas of Expertise

  • Residential Development Sector – Brisbane & South East Queensland
  • Market Value Assessments
  • Development Feasibility
  • Banking and Finance Valuations
  • Family Court Valuations
  • Taxation (Stamp Duty, Capital Gains & GST)
  • Financial Reporting

Formal Qualifications

  • Bachelor of Applied Science (Property Economics) with Distinction (Queensland University of Technology)
  • Associate Member of the Australian Property Institute (AAPI)
  • Certified Practising Valuer

Get to know Opteon’s Commercial Regional Directors

Between them, Opteon’s Commercial Regional Directors have over 65 years’ experience in the property industry. As some of the most knowledgeable and experienced commercial property experts in Australia, the team leads Opteon’s growing Commercial valuation team, bringing a wide range of valuation services and advice to our customers across the country.

Here we take a look at the backgrounds of our Commercial Regional Directors:

Commercial Regional Director Dan Hill Dan Hill | AAPI CPV, BCOM (Property and Finance)

Dan started his valuation career valuing residential property, before moving to the Commercial Division of Opteon (Western Australia) in 2009. In 2014, Dan became a Director and Equity Partner of Opteon (Western Australia), the firm’s youngest ever equity partner. In conjunction with six other partners, he was responsible for managing 65 staff, ensuring business plan and budget targets were met in areas including staff management, business development and financial analysis.

In 2017, following Opteon’s national integration, Dan was appointed Regional Director- Commercial and Agriculture, leading a team of 25 valuers across Western Australia. He prepares valuation reports for key clients for finance purposes, acquisition and disposal, negotiation and strategic advice, as well as managing the day-to-day activities of his team, and their ongoing training and development.

He is committed to his own professional excellence, and that of his team.

Commercial Regional Director Victoria Gracie Victoria Gracie | API CPV

Victoria has over 10 years’ experience in the property valuation and advisory industry.

Victoria is a Certified Practising Valuer and formerly a director of Opteon Central Queensland, gaining exposure to Residential, Commercial and Agribusiness asset types throughout regional Queensland.

Victoria was appointed as the Regional Director for Queensland in 2017, post the national integration, and Regional Director of the Northern Territory in 2020.  She now oversees 40 valuers completing Commercial and Agribusiness work throughout Queensland and the Northern Territory, and Residential work in remote and regional Queensland and Northern Territory.

Located in Mackay, Queensland, Victoria is involved with several local committees and boards, and is a sitting member of the API NSW State Committee. Within Opteon, she is on the National Diversity Council and New Ways of Working program, supporting the move to a remote working environment, amongst other national Commercial and Agribusiness initiatives.

In 2015 she was awarded Opteon’s National Emerging Leader of the Year, for her work in the inaugural Youth Leadership Program, focusing on succession planning in the property valuation industry, which is a key passion of hers.

Commercial Regional Director Michael McNulty Michael McNulty | AAPI CPV

Michael has almost 20 years’ property industry experience across Commercial, Residential, Urban Growth, Municipal and Rural Lifestyle sectors.

With a Bachelor of Business (Property), an MBA, Diploma of Financial Services and Certificate IV in Real Estate, Michael has a deep understanding of the broader property industry in Australia.

As Regional Director, Michael currently leads the Commercial, Agribusiness and Specialised Valuation teams in VIC/TAS/SA.

Managing the provision of services across multiple sectors and states enables Michael to provide his expert knowledge to a range of customers, as well as leading and mentoring the next generation of property valuers within the business.

In 2020/21, Michael co-led the project delivery and implementation of Opteon’s Commercial Uplift program which delivered significant system enhancements and efficiencies resulting is enhanced customer experience.

Commercial Regional Director Chris Mitrothanasis Chris Mitrothanasis | FAPI CPV

With over 20 years’ property experience, Chris brings a wealth of experience and knowledge to Opteon.

He is a Fellow of the Australian Property Institute, a sitting member of the API NSW State Committee, a Certified Practicing Valuer and has completed a Bachelor of Commerce (Land Economics) Degree at the University of Western Sydney.

Chris is accredited within Opteon as a specialist childcare valuer whilst also an expert in the residential and mixed-use development sector. Chris is also a recognised valuer on behalf of the Australian Property Institute, where he is commissioned to undertake Commercial and Industrial rental determinations.

Opteon’s new Core Commercial Report speeds up valuations

In response to market demand for accurate, fast and easy to understand valuations across the sub $5m property asset classes, Opteon has invested in a new Core Commercial Report. The tech-enabled report provides banks with a succinct summary of the key risks and metrics up-front – in about half the time taken by many other valuation providers.

By Ross Turner, National Director Commercial Agri Advisory

Turner said: “With a shortage of valuers in the market, turnaround times across all asset classes is often blowing out to more than 20 days in regional areas. We know how frustrating that is for our clients, so we’ve invested in a solution that lets us deliver a quality valuation report in five days.”

The technology enabled report features:

  • a concise summary of valuation metrics
  • enhanced risk assessment
  • consistent reporting across all geographies
  • logical flow of information
  • simple, straightforward report
  • succinct, data-informed market commentary, and
  • same high-quality data with less duplication of information.
New Core Commercial Report

Opteon’s Commercial Report provides banks with a succinct summary of the key risks and metrics up-front

Opteon has been using the Core Commercial Report since May with great results. Early indications show the report has:

  • reduced turnaround times in metropolitan areas with high volume markets to approximately five days
  • reduced turnaround times in regional areas
  • provided the right level of quality, specific information to inform credit proposal reports
  • improved content quality and format, reflected by a reduction in post-valuation enquiries of 4%, and
  • increased average efficiency in report preparation by 20% – 30%.

The 24-page Core Commercial Report, illustrated with photographs and maps, includes:

  • a cover summary page featuring the key information financiers need, spanning a brief property description, key property and investment metrics, and market value
  • a property profile and risk assessment addressing occupancy, market, asset and asset management factors
  • brief summaries of relevant assumptions, mortgage considerations and location detail
  • a tenure assessment, which includes easements, encumbrances and other interests
  • a planning summary, including relevant council planning and zoning information, existing and permitted uses, and any heritage issues
  • summaries of site and building area details
  • an assessment of construction, building and other improvements made to the property, as well as a condition report and repair recommendations
  • a summary of environmental issues, including contamination and asbestos, and a completed contamination questionnaire
  • an overview of income details, including a lease summary, statutory assessments, outgoings, and a passing income summary
  • succinct, data-informed market commentary, rent and sales evidence (including a sample of comparative property snapshots), and market comparisons for lettable areas and yield
  • a SWOT analysis
  • an estimate for insurance value, and
  • a summary of the valuation method, scope of report and our conclusions.

Case study: Retail property in Mornington, Victoria

New Core Commercial Report for Mornington, Victoria

Mornington, Victoria

The challenge

One of the Big 4 banks faced a valuation challenge at the end of the financial year. It had a customer that had entered into a contract for an investment retail property in Mornington, Victoria and was unable to source a valuation report from any of its valuation panel members in under 20 days.

The solution

As the investor wanted to secure approval before the end of the financial year, the bank called Opteon. One of our valuers was able to inspect the tenanted property quickly and produce a 24-page Core Commercial Valuation report within five days.

The result

The Opteon Core Commercial Report clearly highlighted the key property, financial and risk information up-front, enabling the bank to make a swift, informed credit decision.

The bank and its customer were very pleased with the service and the quality of the report, particularly as speed to approval was critical for the investor.


DISCLAIMER

This material is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s valuers are qualified, experienced and certified to provide market value valuations of your property. Opteon does not provide accounting, specialist tax or financial advice.

Liability limited by a scheme approved under Professional Standards Legislation.

Meet Alex Ben – Director of Commercial

With an impressive portfolio, Alex Ben has over 11 years’ experience in the property valuation arena and is an expert Commercial Valuer.

Recently appointed Director of Commercial within Opteon’s Victorian Commercial team, his broad expertise spans diverse areas. These include industrial, office, retail, residential and mixed-use developments, and residential valuations with additional specialisation in childcare and medical clinics, and food and cold store premises.

As an associate member of the Australian Property Institute and a Property Council of Australia member, Alex has held a true passion for property from a young age. With a family background in property fostering his interest, Alex has always been fascinated by property values and how they are derived.

When asked about this, Alex said,

“Being able to understand the full nature of the property and the driving forces behind its market value was something that led to my curiosity and ultimately my passion for undertaking a career path in valuations”.

With his passion for property undisputable, Alex often tells people that commercial property valuation is like putting a puzzle together. He believes there are different pieces contributing to the property’s value, which in some cases can become extremely sophisticated when ultimately determining what is driving the market value for the property.

“Each property is different, so no day is the same when valuing a broad range of commercial valuations in varying localities. This keeps the work interesting and challenging but rewarding at the same time once you’ve reached an outcome,” he says.

Alex highlighted that the industry is continuing to evolve at a rapid pace and believes Opteon is leading the way with our own data intelligence and technology products. This technological advancement allows our valuers to produce high quality valuations while servicing our clients in a timely manner and keep us at the forefront of innovation.

Is it worth the investment

API Opteon Commercial Market Outlook

Key dynamics of Australia’s commercial property market will be tied to interest rates movements from the second half of 2017, according to the Australian Property Institute – Opteon Commercial Market Outlook report.

Opteon Associate Director – Commercial and API Spokesperson, Nick O’Brien said that the increments of any increases would dictate the quantum of the property market adjustment.

“If it’s gradual then it should be managed, but if there is a succession of quick increases then it could be a concern,” he said.

“An upward movement in the cash rate would translate into a general readjustment through the property market – no sector would be unscathed.”

O’Brien said it would create an increasing debt service rate and cause a repricing of assets, and the equity wedge the investor had will be squeezed from two directions – the higher debt servicing and the price readjustment, which would in turn put pressure on rental growth to make up part of that gulf.”

He said initial movement would be in the development sector, including vacant land, and felt by those investors who have acquired commercial properties at low yields of sub-4%, which we are translating as surrogate yields for underlying development sites.

“They are last to move in a rising market and first to fall in a market downturn. Development properties with some form of improvements, previously considered an underutilisation of the site in the hotter market, at least have a contingency income potential, whereby they can be ‘parked’ with some form of holding income and a tenant paying the rates and utilities, and in some cases the land tax,” he said.

“Since the GFC, we’ve had an influx of offshore investment, and we’ve also had the ever-growing superannuation base – both categories trying to find a home for their money as equities are no longer delivering the returns, nor are the bank deposit rates.”

He said the result has been marked decrease in yields – inner-CBD areas are seeing retail shop and dwelling premises consistently selling at yields of 3% to 3.5% – large growth in prices, and a growing disconnect between the yield and rental rates for these properties.

“That disconnect is a bit of a concern, because the rental growth isn’t the same rate as the growth in capital value. The inference is that there is an underlying development value that’s growing behind the scenes.”

“The climate of low interest rates is far more dangerous than high interest rates.  Every incremental upward increase to the cash rate is magnified, coming off a low base.”

“It would be unlikely that the income returns would be an appropriate rate of return for the asset base, which value we would expect to also adjust downwards with increasing financing costs.

Owners that had taken high loan-to-value ratios at the onset, would be at a heightened risk of asset repricing that would cause them to go into LV breach, meaning their loan-to-value ratio will exceed the bank’s agreed rate, and they will be called upon to tip in more equity, or tip out of the property.

“One logical interpretation is that in a down turning market caused by increasing interest rates, disposable income will be reduced, dragging down discretionary spending. Sectors feeding off discretionary spending will feel the full effect, i.e. retailing and bulky goods retail, which generally align with a prosperous economy and property market.”

The owner-occupier market, which is strong at in the sub-$1 million range, would also be impacted with higher debt servicing costs.

“If the rise were significant we should see a corresponding improve in leasing activity – it has always been a seesaw relationship.”

He said there would be a return to property fundamentals, with assets with secure leases weathering the period more strongly.

“At the onset of the market rise, investment properties with strong lease covenants and long lease terms realised a noticeably sharper yield differential, which broadly ranged from 100 to 200 basis points. However, as the market activity intensified and competition for that product increased, some investors dropped their buying parameters and whereas those yield premiums reflected 7-to-10 year lease terms, 5-year terms became the new norm and in the later stages of this current cycle some investors are now gambling on shorter terms,” he said.

Properties with long leases will be better equipped to handle a transitioning property cycle. One of the categories with typically longer-term leases is that of childcare, which O’Brien said has been a perplexing sector of the market, particularly in the later stages.

“As an investment medium it offers long-term leases, often from 10 to 15 years, with CPI or fixed annual increases, and with several listed tenancies. The yields in that sector have plummeted to levels of 5%, and in some cases less, from the traditional 8% to 9% in 2010-2011. Investors have scrambled for these assets and developers have focused on that sector uptake,” he said.

“There is a real disconnect developing in this sector, and a proliferation of developments to the point that some localities are being saturated and over developed. We have been seeing 30%-plus profit margins in the development of these facilities i.e. where the sales of the finished products are yielding 30%-plus profit on the total cost base. In one case in the outer western metropolitan area a new facility sold for around $6 million, on a cost base of circa $3 million. That profit margin has been the catalyst for the overheated development frenzy of childcare. It will self-regulate soon, because we are seeing these new centres failing to reach appropriate occupancy thresholds to justify their business models.

“There is a lag effect but it will come to the fore in time.”