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Topic - Any chartered surveyors (or similar?) out there?

Nic on 19 Sep 2013
I have been asked to give some (thankfully informal!) advice on issuing shares in the freehold company that owns the leasehold of a flat I own. Note that most of the leaseholders - but not all - are shareholders in the freeholder (let's call it F Limited) already, but certain non-shareholders want to buy in. So this is NOT about buying the freehold.

How therefore do we value F Limited to decide how much to issue the new shares for? I fully understand the present value of a stream of ground rent (in this case let's say an aggregate of 10,000 a year for 100 years, so at (say) 5% that's around 200k in round numbers, but what about the freehold reversion? In theory, in 100 years' time, F Limited will get its hands on a building which today is worth say 10m, so how do I factor this in given on the one hand likely property price inflation and on the other the right of leaseholders to extend their leases (infinitely?)?

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