VALUATION OF…
Trade Related Property
Properties whose value is intrinsically linked to the trading business conducted from them, such as licensed premises or specialised leisure venues.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Trade related property is valued primarily using the Profits Method, since value is driven by the trading potential of the business rather than by rental alone — the Income Capitalisation Method is generally used only as a cross-check where genuine market rental evidence exists independent of trading performance.
Applying the Big Five framework, the Income Generating Unit is the trading entity as a whole rather than divisible space; ‘contract versus market’ income is reinterpreted as actual trading performance (turnover, EBITDA) against a stabilised or market-level potential for a similarly licensed or specialised premises; and the discount or capitalisation rate applied reflects licence transferability, trading risk and operator covenant.
A Direct Comparison cross-check, expressed as a rate per square metre or an EBITDA multiple against sales of comparable trade related property, should be used to test the primary Profits Method 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 Trade Related Property — 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.