Caledonian Trust – A valuation of sites

PUBLISHED: 08 Mar 2019 @ 21:24 | Comments (0) |

I’ve considered each of Caledonian Trust’s (LSE:CNN) major property development sites to estimate current market value. In what follows I’ve been forced to make assumptions. I think these are conservative assumptions (as I understand commuter belt houses around Edinburgh sell for £250 – £300 per sqft,), but nevertheless you should read the numbers with a large pinch of salt.

My intention is not to draw up precise calculations for an individual site, but to give a rough and ready estimate of value overall, hoping that any over-valuation on one site is offset by undervaluation elsewhere.

The valuations assume:

Plots and barns with permission to build or convert are valued at £80 per square foot. That is my guess of what they could be sold for (on average) as plots or unconverted farm buildings (more value might be available if CNN undertook the build and then sold as completed houses).
Planning permission applied for but not yet achieved is valued at £10 sqft of house floor area.
Land is valued at £10,000 per acre. Bear in mind that I have not allowed for any success in persuading councils to include acres of farmland in local plans, e.g. the 200 acres at Gartshore where “proposals have been prepared for a village of several hundred cottages and houses together with local amenities, all within the existing landscape setting”. If these proposals are accepted then the value of the company becomes a multiple of its current MCap.

With the share price at £2.30 Caledonian Trusts’ market capitalisation is £27m.

Sites with planning consent		Estimated value March 2019
St Margaret’s House, Edinburgh	0.74 hectares. Currently 92,000 sqft offices + 168 parking spaces. Market rental £0.5m pa. PP for flats for sale, and/or private rented flats and/or students and/or offices (231,000 sqft). Also “Part of the site is ideal for a hotel”.	Agreed sale (completion in 2020) £15m

Brunstane Home Farm, East Edinburgh	One terrace house One semi-detached house 10 houses from conversion 19 new-build houses (26,759sqft)	£0.3m + £0.4m +£4.5m minus £2.5m build costs + £2m = £4.7m

Wallyford, Musselburgh	PP for 6 detached + 4 semis (12,496sqft) 2018 report: The environment at Wallyford, formerly a mining village, but well located and on the fertile East Lothian coastal strip, is rapidly becoming another leafy commuting Edinburgh suburb.	“we intend to continue the development…but this has been delayed” £1m

Belford Rd, Central Edinburgh	22,500sqft of offices or 21,000sqft for 20 flats 2018 Report: We propose to obtain variations of the existing residential consent to optimise layouts, features and finishes for the current market. The value of the town houses and flats that would be developed has increased considerably over the last few years, especially so for a city centre site in a cul-de-sac by the Water of Leith. Until now the low base value of the site was an obstacle to obtaining funding at the current “normal” rates, but such a scheme now seems possible in view of the potential development profit.	Dec 2017 report: “Development value is likely to exceed £11m.” AGM Feb 2018 once built sale estimate: £11.5m £4m
Two retail parades in Edinburgh	Currently “high yi…..

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