Valuing intangible assets in Mt Gambier commercial

Valuing intangible assets in Mt Gambier commercial

If you own a commercial property in Mount Gambier, you will most likely have had your property valued, you may understand yield and you or your commercial property manager will have itemised your tangible assets.

For a commercial property, your tangible assets would include:

– the building itself

– building management system

– water filtration system 

– HVAC systems

– any machinery that forms part of your commercial property.

These types of assets can be touched, measured and valued. But what about those assets you own that can’t be touched or are difficult to quantify? These are known as your intangible assets.

Examples of intangible assets

Depending on your property and how you’ve set up your structures and landscaping, intangible assets could include:

1. Building branding

Sometimes commercial property owners own more than one property and set them up so they deliver the same level of comfort to the tenants. When owners set minimum standards, or even higher standards in sustainability, they often ‘brand’ their properties so potential tenants know what they’re getting. It’s the same principle that McDonald’s uses in their franchises; no matter where you are in the world, when you see the golden arches, you can be confident you will get the same McDonald’s experience.

2. Landscaping and trees

This area might seem to be both tangible and intangible. In our Australian climate, and hot summers, it’s hard to put a price on shade. However, shade can reduce the heat island effect of concrete, paving and asphalt, lowering energy bills. In the UK now, local councils have a tool for valuing so-named amenity trees based on several criteria including the overall benefit to the community. (Amenity trees are any trees that are not grown or managed for their timber value.) The UK tool, known as Capital Asset Valuation of Amenity Trees (CAVAT), was introduced in 2003. Since then, CAVAT has enabled Urban Forest Managers to assess the value of a tree. When the tree is damaged wilfully or through carelessness, the individual or company responsible can be billed for rectification that could include remedial tree surgery, costs to supply, plant and maintain (for three years) replacement trees, and 20% on top for admin. Should the company refuse to pay, then the tree management authority has the right to claim the full cost of the tree at its current valuation. Given our current focus on passive heating and cooling methods, we believe it is only a matter of time before Australian governments adopt similar methodology.

3. Goodwill

Just as commercial property owners might brand their building portfolio to indicate a positive experience, so too might they include ‘goodwill’ in their intangible asset base. Owners will derive goodwill by providing a great customer experience. Your property might have unrecognised goodwill by being in a great location, meaning customers are more likely to patronise the premises, which means higher profits for a retail organisation. The landscaping of the property might be considered to contribute to employee health and wellbeing. Sound property management over time can also generate goodwill, as this enables organisations to thrive without much more effort on their part.

Commercial property in a historic area or individually has historic significance and this can sometimes mean its goodwill is enhanced. Having other large businesses in the vicinity can also contribute to goodwill and enhance the value of your commercial property.

4. Building apps

Commercial property owners are beginning to look to technology to assist with building management. Some large investment groups are commissioning apps that can do everything from calculating water usage to identifying energy waste. These apps would be regarded as intangible assets and intellectual property by adding value to tenants of these properties.

Can we help with your Mount Gambier commercial property?

Call Herbert Commercial on 08 87 250 500 for a complimentary annual investment portfolio assessment. From this assessment, feedback may warrant the need to seek Herbert Commercial’s advice and expertise with formulating a plan to action restructuring or renegotiating the best lease scenario moving forward. We’re here to help.

As the only dedicated commercial property agency in Mount Gambier, we have a network with and are sought after by national commercial agencies as a trusted extension to their services. Our wealth of commercial knowledge of the Mount Gambier market extends to the broader commercial market, meaning we can ensure you achieve your commercial property goals.

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