VALUATION OF…

Private Schools

Independent school campuses, valued on specialised-use facilities, enrolment capacity and depreciated replacement cost.

Methodology

Private schools are specialised properties. Where the school is let to an independent operator on a commercial lease, the Income Capitalisation Method applies; where owner-occupied, with no direct market of comparable users, the Cost Approach (Depreciated Replacement Cost) of the specialised improvements, combined with a Direct Comparison land value, is generally the primary method.

Under the Big Five framework, the Income Generating Units — classrooms, halls, boarding facilities, sports fields and ancillary buildings — are identified and their contract or notional rental compared to market evidence for institutional-use property. A vacancy allowance is generally not applicable to an owner-occupied campus, but functional and economic obsolescence of the specialised improvements must be assessed, and any discount or capitalisation rate applied should reflect the limited pool of alternative users.

Because specialised school buildings rarely transact independently of the land, the Direct Comparison cross-check is generally applied to the underlying land value only, supported by DRC-derived replacement cost of the improvements, net of accrued depreciation.

Sources

Sources will be listed here as this section is written — each an external link or an uploaded document.