By Andrew Starke
Listed property trust and management company, ALE Property Group (ALE) has cut the valuation of its 87 properties following an independent audit.
As at June 30 2010 its hotels were valued at $713.85 million, a decrease of $12.83 million or 1.77 percent over the half-year since 31 December 2009 and a decrease of $4.66 million or 0.65 percent over the year since 30 June 2009.
ALE’s reassessment of the carrying value of its properties is based upon an independent valuation of 29 of ALE’s properties conducted by Urbis and a directors’ valuation of the remaining 58 properties.
The independent assessment by Urbis was made after considering a significant volume of comparable property sales evidence including:
ALE’s sales of 17 properties for $107.30 million since June 2009 at an average value of $6.31 million and an average capitalisation rate of 6.01% with a range of 4.19% to 6.90%; and
“Urbis were of the opinion that the sales by ALE of 17 ALH leased properties during the past year provided the most relevant and directly comparable evidence,” the company said in a statement to the Australian Stock Exchange.
“These sales indicated a depth in the market for assets of this nature. The 17 sold properties were spread across four capital cities and subject to the same lease terms and conditions as the 29 valued by Urbis.”
Urbis observed that there was significant evidence of continuing high levels of demand from individual private investors for smaller value high quality commercial properties in the Australian market.