VALUATION OF…
Retail Residential
Buildings combining ground-floor retail with residential units above, valued on blended retail and residential income.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Retail-residential properties combine ground-floor retail with residential accommodation above. Where held under a single title and let as an income-producing whole, the Income Capitalisation or Discounted Cash Flow Method applies; where the residential component is sectionalised and sold individually, Direct Comparison of comparable unit sales is the primary method for that component.
Under the Big Five framework, the retail and residential Income Generating Units are analysed separately, as they differ materially in rental basis, lease term and risk. Retail contract rental is compared to market rental for similar street-level premises, while residential income (or sale value) is tested against comparable letting or sale evidence; vacancy allowances and expense recoveries also differ materially between the two components and should not be blended.
A component cross-check — retail via Direct Comparison on a rate per square metre and residential via comparable unit sales or lettings — is used to confirm the reasonableness of the combined valuation.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Retail Residential — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.