Understanding the TRUE (not municipal) value of your commercial property
Understanding the municipal true value of your commercial property

Understanding the TRUE (not municipal) value of your commercial property

A how-to-guide on commercial property valuation

Did you hear that commercial property values increased by 30% in the last valuation roll?

Find out how they cooked the numbers to see if you should object.

There are 3 main methods.

COMPARATIVE MARKET AVERAGE (CMA) A closer look at what similar properties sold for

Yep, your gut instinct is right: compare apples with apples. 

The key here is: look at what sold, not what’s on the market.

1. Pull comparative transfer records TIP: Use Lightstone
2. Find the comparative rate/m2 (i.e. price divided by lettable area or space under roof)
3. Assess the data

Low Range

AverageHigh Range

- Properties that need more work

- Are on smaller stands

- Not well-converted for office use (if consent use)

- Somewhere in-between

- Modern

- Salient features

- Exceptional

4. Apply the CMA rate that best describes your property

(think similar condition, lettability, density)

CMA Rate per m2 x Your Building Size

2. INVESTMENT VALUE The value of a property based on its income

If your property is tenanted, your property isn’t only worth its build

it’s worth its income

Or rather, its income in relation to what an investor will pay for it. 

We call this yield (not au fait with yield? Get the low-down here). 

3. DEVELOPMENT VALUE Value of land with development potential
i.e. What a developer will pay for your opportunity. Rezoned or not…

Whilst considering project feasibility & level of unmanaged risk

1. Identify your development opportunity
a. Does your property lend itself to (re)development?
b. What does your zoning + town planning scheme allow? TIP: Use SJA Town Planners
2. Workout what you can realistically build (your bulk)
3. Chat to developers to find out what they’d pay for this (bulk rate)
4. Assess feasibilities
a. To a developer, zoned land is gold. This means you can achieve a premium for it, compared to unzoned land.
b. Unzoned land means you’ve got to discount your valuation. Rezoning can  take a lot of time and a lot of money.


Now that you have your recipe in-hand, it’s time to take-on your municipal valuation.

If your numbers are worlds apart, don’t fret.
You’ve still got until 3pm on Fri, 6th of April to submit your objection.

We are available for last minute valuations to help support your objection.
Email kat@officespaceonline.co.za

Need offices?
Need a warehouse or factory?
Need a shop or restaurant?
Need an office?
we offer an expansive variety of properties in and around the gauteng area

About Office Space

The space Online Group is the owner of all of these brands, the information systems and information and the intellectual property surrounding each of its brands.