Project Overview
Client
Institutional Investors
Property Type
Mixed Use Residential Development
Reason for Service
GST Margin Scheme Valuation
Preston Rowe Paterson was engaged by AMP Capital Investors to deliver a highly complex, retrospective GST Margin Scheme valuation for a landmark CBD property in anticipation of a future mixed-use residential redevelopment of the site.
The valuation required expert interpretation of GST legislation, ATO rulings and Margin Scheme Valuation Determinations, together with robust market-based valuation analysis across multiple land interests, valuation dates and legal estates.
Summary of Scope of Services
Our engagement involved:
- Preparation of a retrospective GST Margin Scheme valuation
- Assessment of highest and best use at relevant historical valuation dates
- Valuation of multiple land interests including freehold, colonnade and stratum components
- Office investment valuation incorporating long term lease analysis and capitalisation approach
- Development feasibility and residual land value analysis for potential mixed use redevelopment
- Discounted cash flow modelling to support investment and redevelopment scenarios
- Reconciliation of investment value, development value and statutory valuation frameworks
- Interpretation and application of GST legislation, ATO rulings and Margin Scheme requirements
- Preparation of audit ready reporting suitable for reliance by tax advisers, auditors and authorities
Approximately
9,446.88m²
Net Lettable Area
18
Level Commercial Office Building
36
Car Spaces
Asset Overview:
The subject property comprises a prime Sydney CBD landholding with dual frontage to Macquarie Street and Circular Quay East, positioned directly opposite the Royal Botanic Gardens and benefiting from expansive harbour views.
The asset includes an irregular amalgamation of contiguous allotments and is encumbered by a long term institutional head lease. The tenure profile is complex, incorporating freehold land, stratum interests beneath Macquarie Street and proposed colonnade land acquisition.
The site holds significant redevelopment potential for a future mixed use residential scheme within one of Sydney’s most tightly held and high value precincts.
Nature of Advice
Preston Rowe Paterson provided:
- Approved GST Margin Scheme valuation in accordance with Division 75 of the A New Tax System (GST) Act 1999
- Valuation prepared under GST Ruling 2006/7 and Margin Scheme Valuation Determination MSV 2009/1
- Highest and Best Use analysis as at historical valuation dates
- Valuation of multiple component interests, including:
o Freehold land held prior to 1 July 2000
o City of Sydney colonnade land (prospective acquisition)
o Long-term stratum lease beneath Macquarie Street - Detailed investment, development and reconciliation analyses
- Expert commentary suitable for reliance by auditors, tax advisers and government authorities
Valuation Methodology
Preston Rowe Paterson adopted a multi-layered valuation framework, including:
Office Investment Valuation
- Capitalisation of passing rent under the long-term head lease
- Explicit allowance for rental reversions and suppressed income
- Cross-check via Discounted Cash Flow (DCF) analysis
- Reconciliation against contemporaneous CBD office sales evidence
Development Valuation
- Feasibility-based residual land value analysis
- Review of planning controls under:
Central Sydney LEP 1996
Floor Space Ratio and height provisions - Analysis of residential gross realisation and construction costs as at July 2000
Component Land Valuations
- Pro-rata land value allocation for the Circular Quay East colonnade
- Capitalisation approach for stratum land beneath Macquarie Street, treated as a long-term lease within the meaning of the GST legislation
This engagement demonstrates Preston Rowe Paterson’s expertise in:
- CBD office investment valuation
- Major mixed-use redevelopment sites
- GST Margin Scheme and tax-sensitive valuations
- Government land interfaces and stratum interests
- Retrospective and forensic valuation work
We Deal with the Mainstream & Specialise in the Complex for all asset classes
