TECHNICAL BULLETIN
ISSUE 28
APRIL 2018
VALUING DEVELOPMENT SITES: LESSONS LEARNED THE LESSONS THAT CAN BE LEARNED FROM DUNFERMLINE BUILDING SOCIETY V CBRE LTD CHRIS RISPIN MANAGING DIRECTOR, BLUEBOX PARTNERS industrial units. Adjacent was a 45-metrehigh gas holder and the main rail line to London. There was outline planning consent for mixed use development (mainly residential). The end f igure for the completed development was anticipated at around £107m.
In 2017, a claim was heard for a breach of professional negligence by CBRE Ltd on a development site for mortgage valuation purposes undertaken for the Dunfermline Building Society back in 2007. This is the sort of valuation only undertaken by f irms with signif icant cover through professional indemnity insurance, but there are a few points f rom the case worth considering. I’ve taken the case as a basis and looked at the methodology to see what could be applied to other development valuations.
The lender wanted to lend funds on the current value of the site, which was given by the defendant as £17.5m. As a result of this valuation, the lender agreed a loan of £8.7m This already complex case became more so when the borrowers defaulted at the time of the market crash. Receivers were appointed and in 2012 the site was sold for £3.75m. It was accepted that the market had dropped, but even so the
The case This was a six-acre site in Reading including a four-storey off ice building and
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