CVO - Risk Ratings

Risk Ratings

Cashflow Certainty

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Cashflow Certainty - Are there significant concerns with the ability of the property to sustain the market net income over the next three years?

CashflowCertaintyConcerns

No

Y

Y

N

N

N

N

WALE is less than three years and property is likely to prove difficult to re-let

WALELessThan3Years

No

Y

Y

N

N

N

N

Tenant is not in occupation or space is poorly fitted out and underutilised

TenantNotInOccupation

No

Y

Y

N

N

N

N

There is significant doubt about the lease renewal intentions of the major tenant

LeaseRenewalDoubt

No

Y

Y

N

N

N

N

The property has a history of significant vacancies (say greater than 20%)

VacancyHistory

No

Y

Y

N

N

N

N

Tenant is known to be in financial difficulties

TenantFinancialDifficulties

No

Y

Y

N

N

N

N

The property is leased at a rental which is well above market parameters?

LeaseAboveMarket

No

Y

Y

N

N

N

N

Other (please specify) CashflowCertaintyConcernsOther Yes Y Y N N Y N

Lettability if Vacant

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Lettability if Vacant - If vacant or owner occupied, does the Valuer reasonably believe the property may not be lettable within a six month period at the adopted market rent?

PoorLettability

No

Y

Y

N

N

N

N

Poor leasing demand for this accommodation type

PoorLeasingDemand

No

Y

Y

N

N

N

N

Significant oversupply of comparable space in this locality

LettabilitySignificantOversupply

No

Y

Y

N

N

N

N

Oversupply of competing properties available for lease, impacting the leasing prospects of the subject property.

OversupplyofCompetingProperties

No

Y

Y

N

N

N

N

Accommodation requires capital expenditure

LettabilityCapitalExpenditureRequired

No

Y

Y

N

N

N

N

Accommodation is of poor quality and obsolescent

ObsolescentAccomodation

No

Y

Y

N

N

N

N

Size of tenancy is well above normal market requirements in this locality

tenancyAboveMarketRequirements

No

Y

Y

N

N

N

N

Shape of tenancy is poor

TenancyShapePoor

No

Y

Y

N

N

N

N

Poor exposure

PoorExposure

No

Y

Y

N

N

N

N

Other (please specify) PoorLettabilityOther Yes Y Y N N Y N

Saleability

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Saleability - Are there any attributes of the property which would significantly impact on its ability to be saleable at the assessed value level within a six month marketing period?

SaleabilityImpacts

No

Y

Y

N

N

Y

N

Major flooding concerns

FloodingConcerns

No

Y

Y

N

N

Y

N

Major capital expenditure requirements

CapitalExpenditureRequired

No

Y

Y

N

N

Y

N

Unquantifiable environmental concerns

environmentalConcerns

No

Y

Y

N

N

Y

N

Obsolescent improvements

ObsolescentImprovements

No

Y

Y

N

N

Y

N

Poor depth of market due to specialised nature of the asset

PoorDepth

No

Y

Y

N

N

Y

N

Lack of buyer demand in this locality

LackOfBuyerDemand

No

Y

Y

N

N

Y

N

Value at upper end or higher than market parameters

ValueUpperEndOfMarket

No

Y

Y

N

N

Y

N

Restrictive Use Capability

Restrictive

No

Y

Y

N

N

Y

N

Oversupply of comparable properties available for sale

OversupplyofComparableProperties

No

Y

Y

N

N

Y

N

Significant restrictive encumbrances

RestrictiveEncumbrances

No

Y

Y

N

N

Y

N

Remote location restricts marketability

RemoteLocation

No

Y

Y

N

N

Y

N

Other (please specify)

SaleabilityImpactsOther

Yes

Y

Y

N

N

Y

N

Suitability for Mortgage Security

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Suitability for Mortgage Security - Is there a reason that this property may not be suitable for mortgage security purposes?

MortgageUnsuitable

No

Y

Y

Y

Y

Y

N

No legal access

NoLegalAccess

No

Y

Y

Y

Y

Y

N

Known contamination or unacceptable contamination risk

UnacceptableContamination

No

Y

Y

Y

Y

Y

N

Unacceptable asbestos risk

AsbestosRisk

No

Y

Y

Y

Y

Y

N

Negative cashflows are likely

NegativeCashflow

No

Y

Y

Y

Y

Y

N

Poor quality tenure

PoorQualityTenure

No

Y

Y

Y

Y

Y

N

Other (please specify)

MortgageUnsuitableOther

Yes

Y

Y

Y

Y

Y

N

Approvals

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Approvals - Are there any concerns with the ability of the property to obtain and/or maintain required planning approvals over the next two years?

ApprovalConcerns

No

N

N

Y

Y

N

N

Project not yet approved

ProjectNotApproved

No

N

N

Y

Y

N

N

Change to existing approvals is required

ApprovalChangeRequired

No

N

N

Y

Y

N

N

Expiry date of planning permit or development approvals  is less than 12 months

ApprovalExpiryLess12Months

No

N

N

Y

Y

N

N

Other (please specify)

ApprovalConcernsOther

Yes Y Y N N Y N

Saleability - Site

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Saleability – Site - Are there any attributes of the Development Site which would significantly impact on its ability to be saleable at the assessed value level within a six month marketing period?

SiteSaleabilityImpacts

No

N

N

Y

Y

N

N

Major flooding concerns

SiteFloodingConcerns

No

N

N

Y

Y

N

N

Major capital expenditure requirements

SiteCapitalExpenditureRequired

No

N

N

Y

Y

N

N

Unquantifiable environmental concerns

SiteEnvironmentalConcerns

No

N

N

Y

Y

N

N

Obsolescent improvements

SiteObsolescentImprovements

No

N

N

Y

Y

N

N

Poor depth of market due to specialised nature of the asset

SitePoorDepth

No

N

N

Y

Y

N

N

Lack of buyer demand in this locality

SiteLackOfBuyerDemand

No

N

N

Y

Y

N

N

Value level well above median

SiteValueUpperEndOfMarket

No

N

N

Y

Y

N

N

Restrictive Use Capability

SiteRestrictive

No

N

N

Y

Y

N

N

Oversupply of comparable properties available for sale

SiteOversupplyofComparableProperties

No

N

N

Y

Y

N

N

Significant restrictive encumbrances

SiteRestrictiveEncumbrances

No

N

N

Y

Y

N

N

Remote location restricts marketability

SiteRemoteLocation

No

N

N

Y

Y

N

N

Other (please specify)

SiteSaleabilityImpactsOther

Yes

N

N

Y

Y

N

N

Market Volatility

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Market Volatility - Is the market for this asset likely to have an abnormally high degree of volatility?

HighMarketVolatility

No

Y

Y

Y

Y

Y

N

Thinly traded price point

ThinlyTradedPricePoint

No

Y

Y

Y

Y

Y

N

Abnormal factors impacting on current trading levels

FactorsImpactingTradingLevels

No

Y

Y

Y

Y

Y

N

New competition likely to impact

NewCompetition

No

Y

Y

Y

Y

Y

N

Concerns about the physical condition of the improvements

ImprovementPhysicalCondition

No

Y

Y

Y

Y

Y

N

Uncertain legislative and government policy environment

UncertainLegislativeEnvironment

No

Y

Y

Y

Y

Y

N

Nature of local economy - Weak or declining local conditions

NatureOfLocalEconomy

No

Y

Y

Y

Y

Y

N

Approaching or at peak of the market

ApproachingPeakOfMarket

No

Y

Y

Y

Y

Y

N

Overheated market sectors

OverheatedMarketSectors

No

Y

Y

Y

Y

Y

N

Other – please specify

HighMarketVolatilityOther

No

Y

Y

Y

Y

Y

N

Saleability - End Product

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Saleability – End Product - Are there any attributes of the units or allotments to be developed which may impact on their ability to be sold down within the lesser of 12 months from product completion or 6 months prior to the expiration of the sunset clause in that location?

EndProductSaleabilityConcerns

No

N

N

Y

Y

N

N

Poor design features or aspect

PoorDesign

No

N

N

Y

Y

N

N

Units are at a price point at which there is very thin depth of market

ThinDepthOfMarket

No

N

N

Y

Y

N

N

Significant oversupply of units under development in that locality

SaleabilitySignificantOversupply

No

N

N

Y

Y

N

N

Poor construction type/standard or finishes

PoorFinishes

No

N

N

Y

Y

N

N

High number of unsold units within the project

HighUnsoldUnits

No

N

N

Y

Y

N

N

Other (please specify)

EndProductSaleabilityConcernsOther

Yes

N

N

Y

Y

N

N

Cashflow

Description

Rating Type

"Other" Rating

Standard

Strata

Res Dev

Vacant Land

Going Concern

Specialised

Cashflow - Are there significant concerns with the ability of the property to sustain the adopted net profit over the next three years?

CashflowConcerns

No

N

N

N

N

Y

N

The quality of the available trading data is inadequate to form this view

TradingDataInadequate

No

N

N

N

N

Y

N

There are concerns with current management (e.g. poor management or lack of owner involvement)

ManagementConcerns

No

N

N

N

N

Y

N

New competition likely to impact

NewCompletionImpact

No

N

N

N

N

Y

N

The property may require significant capital expenditure to sustain trade

CapitalExpendituretoSustainTrade

No

N

N

N

N

Y

N

Changes in legislation likely to impact on revenue

LegislationImpactRevenue

No

N

N

N

N

Y

N

There are unsustainable market conditions at the present time

UnsustainableMarketConditions

No

N

N

N

N

Y

N

Other (please specify) CashflowConcernsOther

Yes

Y

Y

N

N

Y

N