3AA - 4551 Final Report Nov 2020

ANDERSON + A N D E R S O N VALUATION SURVEYORS
REPORT AND VALUATION
prepared for
INDO - ZAMBIA BANK LIMITED
Executive Summary
Instructions: To prepare for the benefit of the Bank, a valuation report on Stand No. 4551,
Rhodes Park, Lusaka; for purposes of collateral/loan security.
Interpretation
of Instructions: As the valuation is required to support an application for a credit facility,
instructions are that we inspect the property, buildings and improvements; assess
and provide advice and comments, on amongst other matters:
 the current open market value;
 forced sale value;
 estimated monthly market rental value;
 estimated replacement cost of buildings and improvements for insurance
purposes;
 title and ownership and annual ground rent (lease charges);
 suitability of the property and improvements as security for lending purposes,
and whether there would be difficulties if realization by the Bank became
necessary; and
 likely changes in the market value of the property.
Property and
Assets Valued: Land, buildings and ancillary improvements comprising Stand No. 4551;
including service installations which form a permanent part of the property; and
which would ordinarily pass with the premises, on a sale or letting.
Items Excluded: Moveable items, including household furniture and equipment.
Location: House No. 10, fronting onto Fulwe Crescent, opposite Cherise Kids Park Driving
School, less than 100 metres off the Great East Road; within Rhodes Park; and
approximately three kilometres from the City’s Commercial Centre.
Site/Plot Area: Almost rectangular shaped land parcel, extending to 2,541 square metres
(approximately 0.6279 of an acre), delineated and described on Diagram No. 1252
of 1997.
Fencing: Enclosed to boundary by a two and half metre high concrete block wall, topped
with electric fencing. A single opening sliding steel gate (driven by an electric
motor) provides access to compacted earth driveway and parking area. Grounds
are not well maintained, much of the site is overgrown.
Land Use: Zoned for “residential high cost” use, with the annual lease charge (commonly
referred to as ground rent) which is assessed based on the land use and extent
(plot size) of a property currently at K333.30 per annum.
For purposes of payment of rent, the year end is 31st December, and for the
current year (ending 31st December 2020), rent due is K341.30 which we suggest
be paid in full.
MSK/Nov 2020 Stand No. 4551, Lusaka (Indo-Zambia Bank Ltd & Simmer Enterprises Ltd)
ANDERSON + A N D E R S O N VALUATION SURVEYORS 2
Title and
Ownership: Title is a State lease for a period of ninety-nine (99) years from 1 st April 1997,
vested in Vijaykumar Shverbhi Patel and Kumdben Vijaykumar Patel; Certificate
of Title No. 30360; dated 17th March 2017.
Occupation
and Lettings: The property is leased. However, we have not been advised of the terms of the
tenancy. In assessing values, we have assumed a tenancy on terms normally
applicable in lettings of this class of residential property; and that the lease is not
subject to un-usual conditions or outgoings which would have a material negative
effect on values of the property.
Mortgages/
Caveats: No mortgages are registered, and save for the State lease referred to above, and
the reversion vested in The President who holds the land in the country in
perpetuity for and on behalf of the people of Zambia, we are not aware of other
interests or onerous restrictions or encumbrances; statutory or otherwise, likely to
have an adverse effect upon the market or other values of the property.
Council Rating: Lusaka City Council has advised that in accordance with the Rating Act, No. 21
of 2018; the property is listed in the Council’s Valuation Roll (for purposes of
levying local authority property rates) as entry No. 2002148, and described as
“Dwelling House, Garage, Servants Quarters and Premises” with a rateable
value of K2,460,700 assessed as at October 2013.
We are further advised that the rate levy due on the property for the period to 31st
December 2020 has been paid in full.
Buildings: Single storey Dwelling House, Servant Quarters with adjoining Garage and Pump
Room.
Services: Mains single phase electricity is connected.

Water supply is from a borehole, equipped with submersible pump. To improve
reticulation, an underground concrete reservior (10,000 litres) has been built and
a 2,500 litre storage tank supported on a high level steel stand has been installed.
Disposal of waste from sanitary fittings is to a mains sewer system.
Access is from Fulwe Crescent, to which the site has a frontage.
Condition: Buildings and improvements are very old, built in the late 1950’s. Althoulgh
originally constructed to a good standard of workmanship, structures, fittings
and finishes have not been maintained; and are now in a poor state with various
defects apparent.
Bases of
Valuation: As the valuation is required to support an application for a credit facility, bases
adopted to arrive at opinion of values are:-:
(i) to assess market value

“Open Market Value”, being the estimated amount for which an asset or
liability should exchange on the valuation date between a willing buyer and
willing seller in an arm’s length transaction, after proper marketing and
where parties acted knowledgably, prudently and without compulsion; and
assuming that the property has been adequately exposed to the market.
(ii) to assess rental value

“Open Market Rental Value” assuming that the property is vacant and
available to let, and that the letting is at arms-length, between a willing
landlord and willing tenant; that no premium is paid and there is no
additional bid by a prospective tenant with a special interest; and that both
landlord and tenant had acted knowledgeably, prudently and without
compulsion, taking account of the nature of the property and purposes for
which the tenancy is taken.
(iii) to assess forced sale value

“Estimated Restricted Realisation Price” being an amount of cash
consideration before deduction of costs of sale of the property which the
Valuer considers, on the date of valuation, can reasonably be expected to
be obtained (in an arms-length transaction) on the basis that the time
allowed for marketing is unduly short, publicity and market exposure is
inadequate, compared to the period and promotional measures necessary to
achieve the best price on the market.
(iv) to assess replacement cost

“Estimated Reinstatement Cost” in respect of buildings and improvements
only, and refers to the total cost of re-constructing existing structures on a
property, including the replacement of fixtures, fittings and service
installations, in a condition equal to, but not better or more extensive than
their condition when new.
Suitability of
the Property
as Collateral: The outbreak of the Covid-19 (Corona Virus) pandemic early this year has
seriously impacted negatively on the Country’s already under-performing
economy. The long term success of many ongoing building projects cannot now
be adequately quantified, and uncertainties remain regarding the long term
effects of the pandemic. Having spread world-wide, Covid-19 has adversely
affected economies large and small, and all aspects of people’s daily existence.
Economic commentators and financial analysts are quoted as saying that the
ultimate impact on economic growth and financial and real estate markets are yet
to be felt, although it is quite clear that with disruptions in business, increased
operating costs, reduced sales and financial losses which hit many business
entities, it is most unlikely that business entities will embark on new investments
in the short term, for example buying large property. It is anticipated the
pandemic will lead to falling property prices, a scenario we witnessed during the
2007/08 recession and global credit crunch.
With specific reference to Stand No. 4551, we hold the view, despite the current
state of affairs, that the property has various advantages, some itemised below,
and therefore it provides, even under current challenges, good security for
lending purposes.
(a) Rhodes Park Area

Rhodes Park is a conveniently located area – being within short distance of
both City’s Commercial Centre and Mass Media's eastern retail and
commercial hub. The area’s central position has resulted in an extremely
high demand for property from both commercial developers and families.
Due to its historically well planned layout, and reasonably sized plots,
demand for development sites is extremely high, and even old Government
houses (sold to sitting tenants) fetch very high prices when offered for sale.
The suburb is a short drive from two major commercial hubs and as a result,
the land use in the area has been reclassified from primarily residential to
mixed use (commercial/retail/residential/leisure).
Rhodes Park has in the recent past evolved from an older residential suburb
into a mix of commercial and high-end residential area. Businesses have
opted to relocate from the Central Business District, to Rhodes Park, despite
relatively expensive office space in the Area. The area has since been
transformed into a business district, and now a number of large office blocks
being constructed.
(b) Location and Accessibility

The property is located in a good part of Rhodes Park, and being less than
100 metres of the Great East Road, makes it easily accessible. It is within
short distances of the City’s Commercial Centre, the Showgrounds, Mass
Media's commercial hub and various retail centres along the Great East
Road.
(c) Extent of the Property

The property boasts a large site (2,541 square metres or approximately
0.6279 of an acre), and existing buildings not only take up a small portion of
the site, but are old and in a poor state, the land parcel therefore offers
tremendous potential for a modern purpose designed development, to suit
owner’s specifications.
(d) Proximity to Social Facilities

The subject property is located in close proximity to almost all the City’s
major Shopping Centres, including Manda Hill, Northmead, Arcades and
East Park, and relatively easy access to office parks on Thabo Mbeki Road,
the Showgrounds, the Tawheed Mosque, Medland Hospital, major hotels
and the University of Zambia.
(e) Demand for Development Land

Despite the current economic challenges, supply for development land falls
far short of demand. There is a shortage in supply of serviced land for
development in all parts of Lusaka and areas in close proximity, particularly
in easily accessible or prime positions. The result is that sites that become
available change hands quickly and usually at market prices. Even land held
under customary tenure, with limited or no security of tenure (as is the case
in parts of Chibombo, Ngwerere and Chongwe), now change hands at
commercial prices.
This part of the Rhodes Park in which the subject is located, is popular and
well sought after by the City’s high-income groups; and properties and
accommodation in the area continue to be in high demand.
In addition, we can state that:
(i) based on information obtained from searches undertaken and inquiries
made, the leaseholders have security of tenure by way of a long term lease,
with an option, provided under the Lands Act, to renew their 99-year
leasehold interest; and
(ii) we have no reason to believe, based on enquiries made, that there are
onerous encumbrances or restrictions, statutory or otherwise, which would
have an adverse effect upon the market value of the property, or which could
cause difficulties if a sale was attempted.
Date of
Valuation: As the date of valuation has not been specified, opinion of values stated are
assessed as at 27th November 2020, this being the date of inspection of the
property.
Opinion
of Values: Subject to assumptions made, we are of the opinion that values of the property
and improvements, would be in the region of:
(i) market and force sale values:
Category of Assets Open Market Forced Sale
(i) Land K8,010,000 K6,280,000
(ii) Buildings and Improvements K1,550,000 K1,370,000
Total Value K9,560,000 K7,650,000
(ii) the market rental value is in the range of K12,000 (Twelve Thousand
Kwacha) per calendar month, assessed on the basis of a yearly tenancy
and on terms normally applicable in lettings of this class of property, and
assuming that the accommodation is vacant and available to let.
(iii) opinion of estimated reinstatement cost is K3,120,000 (Three Million,
One Hundred and Twenty Thousand Kwacha).
The assessment is restricted to buildings and improvements, and includes
only service installations which form a permanent part of the site, the
figure does not take account of the market value of the land since it is not
normal practice to insure against loss of land.
Should need arise to express above opinion of values in United States Dollars,
figures can be converted at a rate of US $1 = K21.50 which we are advised was
the prevailing exchange rate as at the date of assessment.
Confidentiality: The Report and opinion of values are provided for the sole use of Indo-Zambia
Bank Limited and for the specific purpose to which it refers. The information is
confidential to the Bank and Simmer Enterprises Limited and their
professional advisors in this matter, and no responsibility whatsoever is accepted
to other parties, for any loss or financial obligation, direct or consequential,
which might arise from reliance on the document or any part of its contents.
Disclosure: If, for whatever reason our opinion of values is disclosed to persons other than
the Addressees, then the bases of valuation, assumptions made as well as
exclusion clauses stated in the Report should also be disclosed in full.
M. S. Kasase
PRINCIPAL CONSULTANT
ANDERSON + ANDERSON VALUATION SURVEYORS
MSK/MSK/VAL - 5901
3rd December 2020
Head – Credit Department

Indo-Zambia Bank Limited
Lusaka Main Branch
Plot No. 6907
Cairo Road
P. O. Box 35411
LUSAKA
Dear Sir,
Re: VALUATION OF STAND No. 4551, RHODES PARK, LUSAKA
We have been requested by the Directors of Simmer Enterprises Limited; to prepare for the benefit
of Indo-Zambia Bank Limited and themselves, a valuation report on Stand No. 4551, Rhodes Park,
Lusaka; and for which instructions we are greatly thankful.
In accordance with their request made on 26 th November 2020, we have inspected the property,
undertaken inquiries necessary for purposes of the valuation, made the assessment and now have
pleasure in submitting our Report.
1.0 Purpose of Valuation

We are informed that Stand No. 4551 as well as improvements thereon are subject of a credit
facility to be provided by the Bank to Simmer Enterprises Limited, and that in accordance
with the conditions prescribed for such transactions, independent professional advice is
required on the property’s market value to assist in the formulation of a management
strategy for the advances to be secured on the property.
2.0 Interpretation of Instructions

As the valuation is required to support an application for a credit facility, we understand
instructions to be that we inspect the property and improvements, and:
(1) assess and provide advice in respect of the following values:
(i) the current open market value;
(ii) forced sale value;
(iii) an estimate of the replacement cost of the buildings and improvements for
insurance purposes; and
(iv) estimated rental value of the accommodation.
(2) provide brief details or comments on various matters, including:
(a) a description of the property, its location, improvements and accommodation,
floor areas, services and coloured photographs;
(b) age and condition of structural, electrical and mechanical components, type of
construction and an indication of the building’s likely useful economic life;
(c) title and ownership, land use classification (zoning) and annual lease charges
(ground rents), council rates, encumbrances, caveats and leases;
(d) whether there is potential for change of use or other development potential;
(e) planning, highway and other statutory considerations;
(f) any actual/potential developments in the vicinity of the property which would
materially affect the value of the subject;
(g) environmental issues and contamination, either on the subject site or on adjoining
sites;
(h) confirm the property boundary line and verify if there are any encroachment or
boundary disputes;
(i) suitability of the property and improvements as security for purposes of
collateral; and whether there would be difficulties if realisation by the Bank or
lending institutions became necessary; and
(g) assumptions made and matters considered in formulating our opinion of values
reported, together with bases of assessment adopted and assumptions made.
3.0 Format of the Report

The format of reporting adopted is in accordance with standard practice; and is intended to
provide, as far as is possible, information usually required by the Bank; including a
description of the property and improvements as well as matters considered in arriving at our
opinion of values.
In this respect, we have attempted to follow as far as practical, headings (but not necessarily
the sequence) which are now being stated in Letters of Instructions issued by the Bank.
4.0 Property and Assets Valued

The assessment is restricted to land, buildings and ancillary improvements; and reflects only
service installations which form a permanent part of the property, and which would
ordinarily pass, with the premises, on a sale or letting.
Moveable items, including furniture and equipment, are excluded from the assessment.
5.0 Inspection of the Property
5.1 Date of Inspection

27th November 2020.
5.2 Extent of the Inspection

The Report is not the result of a structural or soil survey, since it is not standard practice to
undertake such surveys when inspecting a property for purposes of assessing market or other
values unless specific instructions are issued, and such surveys are therefore considered to
be outside the scope of the instructions, nor have the services been tested. We cannot
therefore give guarantees in these respects.
In accordance with standard practice, we have restricted the inspection to a visual survey of
the land and buildings, noting the design and construction of each structure, layout of
accommodation, service installations available and the condition and the state of repair.
We did not inspect parts of the property and buildings which are covered, unexposed or
inaccessible (such as foundation walls and footings; roof timbers; pipe work and electrical
conduits and cables within roof voids, walls and floors), and for purposes of assessing
market and other values, such parts have been assumed to be in good structural repair and
condition and free from hazardous materials, rot and infestation. We cannot express an
opinion about or advice on the condition of parts not inspected and except for matters
mentioned or referred to, this Report should not be taken as making any implied
representation or statement about such parts.
In the above respects only, our valuation is carried out on the assumption that parts not
inspected are in good structural repair and condition, do not contain any deleterious or
hazardous materials and that available services function satisfactorily. No account has been
taken for inherent latent defects, if any.
5.3 Floor Areas

Considering that the subject is a residential property, the purpose for which the valuation is
commissioned and in accordance with standard practice, we took measurements of buildings
over external walls, and floor and covered areas have been calculated on gross external
basis. For purposes of conversion, one square metre is taken as equivalent to 10.764 square
feet
5.4 Property Boundary

We have not surveyed the extent of the property to confirm beacon positions, as due to time
and cost constraints, it is not standard practice to undertake such surveys when inspecting a
property for purposes of assessing market or other values; and this aspect is therefore
considered to fall outside the scope of our instructions. However, we have assumed, in the
absence of evidence to the contrary that the concrete block wall enclosing the subject site is
erected along boundary lines; and further, we have not observed any encroachments, and we
have not been informed of any boundary disputes with adjoining sites.
We have relied on information contained in the Certificate of Title and confirmed by
searches made at the Ministry of Lands, as to the extent of the site; and the area stated in the
Report is as provided by the Ministry. For purposes of conversion, we have taken one
hectare to be equivalent to 10,000 square metres or 2.471 acres.
6.0 Description of the Property and Improvements

We provide under various Sections of Paragraph 6, factual data relating to the property, as
usually required by the Bank.
6.1 Physical Location

House No. 10, fronting onto Fulwe Crescent, opposite Cherise Kids Park Driving School,
just off the Great East Road; within Rhodes Park; and about three kilometres from the City’s
Commercial Centre. Global Position System Reference is 15°24'21.09"S and 28°18'2.94"E.
For ease of identification of the location, an extract from Google Earth Map showing the
property boarded in red is provided at Appendix I.
6.2 Legal Description

Under the Lands and Deeds Registry Act, Cap 185, the property is described as:
“ALL that piece of land in extent 2541 square metres more or less being Stand No. 4551
situate in the Lusaka Province of Zambia which piece of land is more particularly delineated
and described on Diagram No. 1252 of 1997 except and reserved all minerals oils and
precious stones whatsoever upon or under the said land ..............”
A copy of the Certificate of Title is provided at Appendix IV.
6.3 Site and Fencing

The site which as stated extends to approximately 0.6279 of an acre, is almost rectangular
shaped, and fully enclosed to boundary by a two and half metre-high concrete block topped
with electric fencing. A single opening sliding steel gate operated by an electric motor
provides access to compacted earth driveway and parking area. Grounds are not maintained,
at present much of the site is overgrown.
6.4 Land Use Classification

The Ministry of Lands have advised that the property is zoned for “residential high cost”
use, and that the annual lease charge (commonly referred to as ground rent and which is
calculated based on the land use and plot size of a property) is currently at K333.30 per
annum.
For purposes of payment of this rent, the year end is 31st December, and for the current year
ending 31st December 2020, ground rent due amounts to K341.30, which we suggest be paid
in full.
6.5 Title and Ownership

We have been provided with a copy of the Certificate of Title, and we have also made
searches at the Lands and Deeds Registry (Ministry of Lands) to confirm title and
ownership, and establish interests held in the property or restrictions, if any, attaching
thereto. We are informed that title is a State lease for a period of ninety-nine (99) years from
1st April 1997. The registered title holders are Vijaykumar Shverbhi Patel and Kumdben
Vijaykumar Patel as joint tenants; Certificate of Title No. 30360, dated 17th March 2017.
6.6 Occupation of the Property

We are aware that the property is leased. However, we have not been provided with a copy
of the lease agreement or advised of the terms of letting, and we cannot therefore comment
on the lease terms, or their effect, if any, on the values of the property. In assessing values,
we have assumed that the tenancy is on terms normally applicable on the lettings of this
class of residential property, and that there are no onerous or unusual conditions or
outgoings which would have a material negative effect on the value of the property.
6.7 Charges/Mortgages and Caveats

Searches and inquiries we have made at the Lands and Deeds Registry in the Ministry of
Lands do not reveal any mortgages or similar charges being registered against the property.
Save for the State lease referred to above, and the reversion vested in The President who
holds the land in perpetuity for and on behalf of the people of Zambia; we are not aware of
any caveats, or unusual restrictions or encumbrances statutory or otherwise; likely to have an
adverse effect on the values of the property. However, should detailed information or
assurances on title be required, we suggest that legal advice be sought.
6.8 City Council Rating Assessment

In accordance with the Rating Act, No. 21 of 2018, Stand No. 4551 being a residential
property and used as such, is subject to payment of local authority rates, and is listed in the
current Lusaka City Council Valuation Roll (entry No. 2002148), described as “Dwelling
House, Garage, Servants Quarters and Premises” with a rateable value of K2,460,700
assessed as at October 2013.
We are further advised that rate levies charged on the property for the period to 31 st
December 2020 have been paid in full.
We wish to also mention that the City Council is in the process of preparing a new Valuation
Roll which will be implemented with effect from 1st January 2021 and will update values.
We believe that once the exercise is completed a new assessment will be placed on the
subject.
6.9 Services
(i) Mains single phase electricity is connected.
(ii) Water supply is from a borehole, equipped with submersible pump. To improve
reticulation, a 2,500 litre storage tank supported on a high level steel stand has been
installed and an underground concrete reservior (10,000 litres) has been built.
(iii) Disposal of waste from sanitary fittings is to a mains sewer system.
(iv) Access is from Fulwe Crescent, to which the site has a frontage, off Great Easst Road.
6.10 Buildings
In addition to the boundary wall and service installations referred to above, the property is
developed with the following structures:
(i) Dwelling House
(ii) Servants' Quarters
(iii) Garage
(iv) Pump Room
For purposes of identification, a single line site and accommodation layout plan, and a few
pictures are given at the end of the Report. The plan is not drawn to scale.
6.11 Brief Description Buildings and Accomsmodation

(i) Dwelling House
Old, single storey, and constructed of ridged roof of trafford asbestos sheets on timber
trusses and purlins. Timber fascia boards to eaves. Roof to the veranda additionally
supported on pillars. Brick/concrete block walls, rendered externally. Steel framed
glazed windows, fitted with burglar bars. Steel casement doors and steel framed
timber doors, with external entrances fitted with steel grille gates. Concrete floors.
Internal finishes and fittings include hard/softboard ceilings in all rooms. Walls are
plastered and painted; and there are ceramic wall tiles to wet areas in bathrooms and
kitchens. Built in cupboards to bedrooms. Single bowl stainless steel sink unit and
fitted cupboards to kitchen. Timber shelves to pantry. Bath tub, water closet and wash
hand basin to main bathroom. Shower, water closet and wash hand basin to second
bathroom. Bath tub and wash hand basin to third bathroom. Water closet and wash
hand basin to guest toilet. Wall-mounted geyser for hot water supply.
Accommodation comprises a self-contained main bedroom, second self-contained
bedroom, third and fourth bedrooms, living room, dining room, kitchen, pantry, second
bathroom, separate bathroom, guest toilet, passageways and front veranda.
(ii) Servants’ Quarters

Monopitched roof of corrugated asbestos sheets on timber trusses and purlins. Timber
fascia boards to eaves. Concrete block walls, rendered externally and plastered
internally. Steel framed glazed windows. Steel framed timber doors. Low level water
closet and shower to toilet/washroom. Concrete floor with cement and sand screed
finish.
Accommodation (which is in very poor state) comprises bedrooms, living room,

kitchen, shower/toilet.
Old building, not in good condition – has wall and floor cracks, stained walls and
sanitary fittings, electrical sockets and light fittings are damaged.
(iii) Garage
Attached to the Servants’ Quarters. Constructed of a lean to roof of corrugated
asbestos sheets on timber purlins. Concrete block walls, rendered externally, plastered
internally and painted. Concrete floor.
Designed to accommodate one car.
Old building, not in good condition - damaged roof sheets and stained walls.
(iv) Pump Room

Small structure erected against boundary wall, of a monopitched roof of corrugated
iron sheets on timber purlins. Concrete block walls, rendered externally and plastered
internally. Concrete floor.
6.12 Floor Areas

Calculated on gross external basis, approximate floor areas are as follows:
Buildings/Accommodation square metres square feet
Dwelling House 175.60 1,890
(i)
Front Veranda 12.90 139
Servants Quarters 33.90 365
(ii) Washroom/Toilet 1.70 18
Veranda 1.90 20
(iii) Garage 18.20 196
(iv) Pump Room 1.60 17
Total 245.80 2,645
6.13 Condition and State of Repair

As mentioned, the Report is not the result of a structural survey of buildings or soil survey of
the site, since it is not standard practice to undertake such surveys as part of a valuation
exercise, unless circumstances dictate or specific instructions are issued; and this aspect is
therefore considered to be outside the scope of our instructions, nor have services and drains
been tested. We cannot therefore give any guarantees in these respects.
However, from the extent of our limited inspection carried out as described above, and
which we considered adequate for the purposes of assessing market and other values, we can
mention that buildings (thought to have been built in the late 1950’s), are of basic design,
with limited fittings and finishes, and have not been well maintained, the accommodation is
not in a good condition and state of repair; and there are various defects, including but not
limited to:
(i) damaged roof sheets causing leaks;
(ii) walls and ceilings are stained due to leaks and rising dump;
(iii) putty to some windows has become britle with age and is loose;
(iv) some sanitary fittings are broken or stained;
(v) light fittings are broken and cables at some points are exposed;
(vi) plaster has flaked off rear wall footings; and
(vii) floor finishes are loose in places.
7.0 Other Key Factors Usually Requested by the Bank
7.1 Copies of the Practicing Certificates for the Valuation Surveyor who inspected the Property
We have attached at Appendix VI copies of Certificates for the Valuation Surveyor who
inspected the property. These are issued by the Valuation Surveyors Registration Board and
the Surveyors Institute of Zambia.
7.2 Details on Internal Improvements of Buildings

The Bank often requests that we give details of the interiors of buildings with coloured
pictures. In Section 6.1, we have given a detailed description of each building or structure
on the property; and stated where applicable, internal finishes and fittings, including those in
toilets. In addition, ancillary improvements are described in relevant sections of the Report.
We have also provided colour photographs of buildings and improvements within the
property; these are given for external sections of buildings and improvements.
7.3 Copy of Official Search

We have obtained from the Lands and Deeds Register at the Ministry of Lands, Computer
Print-Outs which at the present time are considered as evidence of official search on title and
related matters. Copies are attached at Appendix V.
7.4 Site Plan Identifying Building/Accomodation Layout of the Valued Property

A single-lined site/accommodation layout plan is provided at Appendix II. This is not
drawn to scale, but submitted for identification purposes only.
7.5 Confirmation that the Property Described in the Report is the Exact Property Described on
the Certificate of Title
We took measurement of the Site using roll up tape measure and we have also used Google
Earth Map, GPS Coordinates Application and the Zambia National Spatial Infrastructure
Map to obtain and ascertain the actual boundary lines of the property as it appears on the
Certificate of Title. We have further also made verbal searches at the City Council to
confirm the existance of the subject as it appears on the Certificate. We have conducted
these exercises as part of our due diligence so as to confirm that the inspected property is
not different from the one delineated on the Certificate of Title presented by the Customer
Due to time and cost implications it would prove difficult to engage Certified Government
Surveyors to undertake the verification exercise. In addition we note that the Customer did
not expect this aspect to form part of our instructions, as would any other property owner
unless circumstances dictated otherwise.
7.6 Outstanding Land Rent and Property Rates

Our findings on the Land Rent are given under Sections 6.4 of the Report. Property rates
refer to local authority rates administered under the Rating Act, now No. 21 of 2018. For
City Council property rates, details are provided under Section 6.8.
7.7 Assumptions and Limitations

Based on searches and inquiries, the assumptions and limiting conditions we have adopted in
the appraisal of the property and improvements are listed at paragraph 26.0 of the Report.
8.0 Planning and other Building Consents

Based on inquiries made, we have assumed that necessary statutory consents and approvals
have been obtained; that the property is developed and occupied in accordance with valid
planning and building regulation approvals, to the full satisfaction of the authorities
concerned; and that there are no Statutory or other development proposals likely to adversely
affect the property or its present use.
However, if reassurance is required, we recommend that further advice be sought to confirm
that:-
(i) the position is correctly stated in our Report;
(ii) the property is not adversely affected by other decisions made or conditions prescribed,
by public authorities; and
(iii) there are no outstanding statutory notices.
9.0 Highway and Other Development Proposals

We have made inquiries with the Planning Authority and relevant Government Departments
to establish whether there are major development proposals that might be undertaken in this
part of the Rhodes Park, either by Government, organizations or individuals, and which
might have a material impact on the market value of the property, either at present or in the
near future. We informed that except for the redevelopment and refurbishment of several
properties especially by individual business entities such as that undertaken by Medland
Hospital and Standard Chartered Bank Head Office, no major developments have been
proposed or are under consideration. We have further been advised that there are no
planning proposals designated for the area.
As regards highway schemes, Government under the Lusaka Decongestion Project (LDP)
has engaged Afcon Construction Limited to re construct and widen the Great East Road
from Kabwe Round-About to Munali Round-About, from two lanes to three lanes in each
direction. Works also include modification of the Kabwe Round About, and construction
works are reported nearing completion. We also understand that under the Lusaka 400
kilometres road project (L400), Government is continuing to rehabilitate and construct or
upgrade selected urban roads in Lusaka, to include some in Rhodes Park, Northmead, Thorn
Park, Olympia and Kalundu amongst other areas.
In view of the above, we have carried out the valuation on the basis that there are no major
developments which would have a material negative effect on the market and rental values
of the property. In addition, we have assumed that current private sector investment in real
estate, although mainly limited to the development of commercial accommodation, is likely
to improve the quality of property and create a high demand for space; and we are of the
opinion that as a result market and rental values of properties in this part of the Rhodes Park,
including the subject, will shift upwards in real terms at least in the long term.
10.0 Contamination, Pollution and Environmental Considerations

Due to cost and time constraints, we do not, unless specifically instructed, commission as
part of our inspection of a property, investigation into environmental matters or issues of
contamination or pollution, and any observations made are expressed strictly on the
understanding that we have not undertaken any formal environmental study. In the absence
of specific investigations and where there is no apparent reason to suspect potential for
contamination, our valuation is made on the basis that the property is not affected.
We are not aware of the content of any environmental audit or other environmental
investigation or similar study, which has been carried out on the property which may draw
attention to contamination or the possibility of any contamination. Further, we have no
reason to suspect that the property has at any time in the past been exposed to contamination.
In undertaking our work, we have based on the site visit, assumed but can give no
assurances that no contamination or contaminative uses have ever been carried out on the
subject property or on neighbouring sites and have therefore that the subject and adjoining
sites are not contaminated.
11.0 Site Conditions and Flooding Risks

A standard valuation exercise does not normally extend to investigations in site conditions as
such an exercise is costly and time consuming. We do not therefore carry out or normally
commission a site investigation or geophysical survey in order to determine the suitability of
ground conditions and services, nor do we undertake archaeological or environmental
surveys. In the absence of information that indicates there are adverse ground conditions
affecting a subject property, we assume, but can give no assurances that the ground has
sufficient load bearing strength for the existing structures or any structures, proposed or
planned.
In addition we can mention that information available at the City Council indicates that the
area in which the subject is located is not prone to flooding and available public drainage
systems are fairly adequate to deal with the volume of waste generated in the area; as well as
the level of storm water experienced each year.
12.0 Approach to Assessment of Values
12.1 Valuation Methodology

The subject property, including land and buildings are currently occupied for residential
purposes, which use we have assumed will continue for the foreseeable future. We have
been instructed to advise on the market value for the subject but as the report is required for
purposes of collateral, we have also assessed rental and forced sale values as well as
reinstatement cost (buildings and improvements) for insurance purposes.
Starting with reinstatement cost, the only approach to assessment of value is to establish
current buildings costs of materials and labour, based on the nature of the improvements on
site. Our approach has been to establish the type of improvements, identify materials used
and type of construction, and calculate floor and covered areas. Taking account of changes
in construction techniques and improved availability of building materials, we have then
applied current costs to arrive at total estimated cost as reported.
There are common attributes to the assessment of market and forced sale values; both
assume a transaction between seller and buyer and the appraisal entails establishing a value,
but based on different sale conditions. Market value assumes a normal transaction, between
a willing seller and willing buyer. Under a forced sale scenario, the intention is to achieve a
disposal quickly, and therefore time allowed for marketing is normally unduly short.
Assessment of rental value assumes a letting of a property, from owner to tenant, with the
terms of occupation stated, which specifies rights and obligations of the tenant’s otherwise
limited occupation of the property.
There are four possible approaches to estimating the value (market or forced sale) of a
property; namely: -
(1) Land Value by Market (Sales) Comparison;
(2) Property Value by Market Comparison;
(3) Property Value by the Cost Approach; and
(4) Property Value by Income Approach.
Assessment of a Property by the Land Value by Market (Sales) Comparison is normally
adopted in situations where the objective is to establish the value of the site; for example a
vacant un-developed plot; or if the economic value of the buildings is lower than
redevelopment value.
Property Value by Market Comparison would be appropriate if the assessment is intended to

produce a value for both the site and improvements; normally for properties which have
evidence of sales and rental is adequate.
Assessment of the Property Value by the Value Cost Approach is normally applied if there is
no comparable evidence, for example in the case of churches, incomplete buildings and
specialized properties. This method is usually applied as a last resort.
Assessment by Income Approach is normally used for properties held as long term
investment and often producing (or would produce) regular income by way of rent.
Examples include such as office developments held by pension funds or shopping centres.
The assessment is based on income inflow (rental stream) over the period of the investment.
Considering the extent of the site, design, age and condition of buildings; we are of the view
that Approach Nos. 3 and 4 are not in the present instance appropriate methods to be adopted
in the appraisal of the property. The nature of the property, dictates that the assessment be
based on a “Comparative Method”, based on prices paid for similar properties within the
area or similar locations.
12.2 Classification of the Property

The subject of valuation, including buildings and ancillary improvements, is zoned and
developed primarily for residential use; and structures, accommodation and ancillary service
installations are of standard specification and construction. The property is therefore not
specialized.
Specialized properties are those which, due to their specialized nature, are rarely, if ever,
sold on the open market for single occupation for a continuation of their existing use, except
as part of a sale of the business in occupation. Their specialized nature may arise from the
construction, arrangement of the accommodation, size or location of the property, or a
combination of these factors, or may be due to the nature of the plant and machinery and
items of equipment which the buildings are designed to house, or the function or the purpose
for which the buildings are constructed.
Examples of Specialized properties include oil refineries and chemical works where
buildings are no more than housing for highly specialized plant; hospitals, universities,
museums, libraries and other similar establishments.
Non-Specialized properties are those for which there is a general demand, and which are
commonly bought or sold on the open market for their existing or similar uses, either with
vacant possession for single occupation, or (whether tenanted or vacant) as investments or
for redevelopment.
Examples of Non-Specialized properties include dwelling houses and residential flats,
commercial units such as shops, warehouses, offices and light industrial properties; as well
as agricultural smallholdings.
12.3 Valuation Considerations

In selecting the bases of valuation adopted, we have considered various factors, including:-
(i) that the property is located in a good position, less than 100 metres off one of the
City’s major roads;
(ii) the large extent of the site, and the limited level of development;
(iii) design of buildings and improvements, age and the condition of state of repair;
(iv) available evidence of sales of similar properties;
(v) demand for land in Lusaka and nearby areas in general; and residential properties in
particular;
(vi) current construction costs of various types of residential buildings, as well as

availability of building materials and;
(vii) factors affecting values of property in this part of the City.
12.4 Property Risks

We are aware that the Bank do requests that Valuation Surveyors provide a rating of a
subject property in terms of lettability, marketability, saleability, locality and building
quality based on BAGL’s standard rating scale. We wish to state that we are not qualified to
assess the capital or income risks that might be related to the subject property during the loan
period, but we can comment on the future prospects for the movement in the values of the
property in comparison to similar properties over a short term period.
The nine-point evaluation scale (1 - unlettable, 2 - very poor, 3 - poor, 4 - below average, 5 –
average, 6 – above average, 7 – good, 8 - very good and 9 - excellent).
Factor Rating Scale Comments
1 Location/Situation 8 The property is well positioned, less
than 100 metres off Great East Road,
and is expected to benefit from the
ongoing regeneration and
development of the area as well as the
forecasted increase in commercial
activities and surging population in
the surrounding areas.
2 Building Quality 3 We have not been provided with
building survey report on the
condition of buildings and
improvements, but based on our
inspection, we can state that existing
buildings are old (thought to have
been built in the late 1950’s) and have
‘outlived’ the economic usefulness,
the site is therefore ripe for re-
development.
3 Title 8 A State Lease for 99 years from 1 st
April 1997. Our opinion is that the
registered title holders have a long-
term leasehold interest; and tenure is
secure.
4 Market Value 8 The number of willing purchasers for
Volatility prime property is at present uncertain,
given the decline in the overall
transactions in the market as a result
of the COVID-19 pandemic which has
exerted downward pressure on prices
of property.
5 Rental Value 5 the landlord is not getting maximum
Volatility rental income from the property due
to the fact that buildings and ancillary
improvements are old and are now in
a poor state.
6 Liquidity 8 Should the property be marketed for
sale, we would expect a reasonable
number of prospective purchasers, in
view of its location, extent of the site
and development potential.
13.0 Bases of Valuation

In accordance with standard practice, the bases of assessment adopted to arrive at opinion of
the values are:
(a) to assess value of land, buildings and other structures:- open market value
(market/sales comparison);
(b) to assess replacement cost of buildings and ancillary improvements:- estimated
reinstatement cost;
(c) to assess forced sale value:- estimated restricted realization price; and
(d) to assess rental value of the accommodation:- open market rental value.
These are defined as follows:
13.1 Open Market Value

An opinion of the estimated amount for which an asset or liability should exchange
unconditionally on the date of valuation, assuming:-
(a) a willing seller;
(b) that, prior to the date of valuation, there had been a reasonable period (having regard to
the nature of the property and the state of the market) for the proper marketing of the
leasehold interest, for the agreement of the price and terms and for the completion of
the sale;
(c) that the state of the market, level of values and other circumstances were, on any
earlier assumed date of exchange of contracts of sale, the same as on the date of
valuation;
(d) that no account is taken of any additional bid by a prospective purchaser with a special
interest; and
(e) that both parties to the transaction had acted knowledgeably, prudently and without
compulsion.
13.2 Open Market Rental Value

An opinion of the best rent at which a new letting of the accommodation would have been
completed unconditionally at the date of valuation, assuming:-
(a) a willing landlord;
(b) that, prior to the date of valuation, there has been a reasonable period (having regard to
the nature of the property and the state of the market) for the proper marketing of the
interest, for the agreement of the rent and other letting terms and for the completion of
the letting;
(c) that the state of the market, level of values and other circumstances were, on any
earlier assumed date of entering into an agreement for a lease, the same as on the date
of valuation;
(d) that no account is taken of any additional bid by a prospective tenant with a special
interest;
(e) a stated length of term and stated principal conditions, applying or assumed to apply to
the letting and that the other terms are not exceptionally onerous or beneficial for a
letting of the type and class of the subject property;
(f) that no premium passed and that any rent free period is in respect only of the time
which would have been needed by the incoming tenant to make the subject property fit
for occupation; and
(g) that both parties to the transaction had acted knowledgeably, prudently and without
compulsion.
13.3 Lease Terms Assumed in Assessing Rental Value

In assessing rental value, we have assumed, considering the nature and extent of the
property, the level of development, quality of accommodation as well as demand for
residential accommodation, a lease at arms-length, on a year to year basis, with an option to
renew and terms normally applicable in lettings of this class of residential property. In
addition to standard terms, such as grant of quiet enjoyment, the Landlords would be
responsible for structural repairs and payment for insurance of the property as well as
property taxes, including local authority rates. The tenant, in addition to compliance with
normal terms, such as payment of rent as agreed under the lease, would be responsible for
routine repairs and maintenance, and settlement of charges for services supplied to the
premises, including electricity.
13.4 Estimated Restricted Realization Price

An opinion as to the amount of cash consideration before deduction of costs of sale; which
the Valuation Surveyor considers, on the date of valuation, can reasonably be expected to be
obtained on future completion of an unconditional sale of the interest in the subject property
assuming:-
(a) a willing seller;
(b) that, completion will take place at a future date specified by the Client, which does not
allow a reasonable period for the proper marketing (having regard to the nature of the
property and the state of the market);
(c) that no account is taken of any additional bid by a prospective purchaser with a special
interest; and
(d) that both parties to the transaction (the sale) will act knowledgeably, prudently and
without compulsion.
13.5 Comment on Assessment of Forced Sale Value

The Royal Institution of Chartered Surveyors and other professional organizations whose
members are involved in the appraisal of real estate, have following the economic melt-
down, and many of the fore-closures that took place in the not too distant past, particularly
in Britain and the United States, expressed great reservations on the provision, to lending
institutions, of an opinion of forced sale value.
The principal argument is that an opinion of forced sale value amounts to no more than a
forecast, and is based on many variables, some of which are difficult to quantify with a fair
degree of accuracy. Professional organizations are now encouraging property Valuation
Surveyors and other related property consultants not to undertake such assessments or
provide opinions of forced sale values.
With regard to the local environment, demand for land is high despite current economic
circumstances, particularly in urban areas, and has been for many years. For property in
areas well sought after by high and mid-income groups, including sites in good areas which
have development potential, there may be little difference between market and forced sale
value. Where there is a marked difference, experience has shown that in most cases,
potential buyers often offer lower than market prices because they are aware that the owner
of the property which is being sold is acting under duress (as is often the case with property
repossessed and advertised by lending institutions), bidders therefore tend to adopt a
vulturous approach, and will offer and negotiate for the lowest price possible.
Another aspect of disposal under forced sale circumstances is litigation, and the lengthy
procedures a mortgagee or receiver in possession may have to follow in selling the property.
These procedures tend to be quite costly, and in the end, the disposal takes far much longer
to conclude than a normal sale.
We therefore suggest that the Bank takes account of this position with regard to the opinion
of forced sale value stated.
13.6 Estimated Reinstatement Cost

The cost of reconstructing buildings and improvements on a property, in the event of
complete destruction, for example by fire, in a condition equal to but not better or more
extensive than the present condition.
Damage caused to buildings and ancillary improvements on a property, for example by fire
or storm, is usually partial, the assumption of complete destruction of existing structures is
therefore hypothetical, and made only for purposes of the valuation.
Accordingly, our opinion of reinstatement cost assumes complete destruction of the dwelling
units and ancillary improvements on site, and includes an allowance for debris removal at a
percentage of the building costs. Our opinion does not include allowances for inflation in
either building costs or labour charges, nor does it take account of costs which might be
incurred in connection with matters relating to environmental issues or complying with
exceptional conditions which may be specified by public authorities.
The assessment does not reflect the market value of the site (land) since it is not standard
practice to insure against loss of land, and land per-se cannot, in the ordinary sense, be
destroyed unless due to substantial contamination or un-planned quarrying; and neither can
it be “replaced” except in instances of land reclamation or the acquisition of an alternative
property or site.
14.0 Highest and Best Use

We are aware that there is a high demand in areas such as Rhodes Park, Fairview and
Longacres for commercial accommodation, and that several residential properties have been
redeveloped for office or retail use.
Considering location and extent of the plot, age and condition of buildings and ancillary
improvements, level of development in relation to the extent of the site, demand for
commercial sites as well as the prevailing state of the economy, we are of the opinion that
for purposes of ascertaining market and force sale values, use of the property for commercial
purposes is the highest and best, and we have reflected this aspect in the assessment.
15.0 Potential for Change in Use

The Bank often expects that we advise whether there is any significant prospect of or
potential for change of use, or other development on the subject or neighbouring properties
which might materially affect the value of the subject. The effects referred to can be either
negative or positive.
Based on our knowledge of the area as well as the inspection and inquiries made, we can
mention that the majority of properties along Fulwe Crescent and in the immediate vicinity
of the subject originally comprised residential properties. However, due to demand for
commercial accommodation, the Planning Authority has permitted in several instances
where applications are tendered, change of use from residential to mixed or commercial use.
Several sites have been redeveloped or old houses have been extended or renovated and
converted to commercial use (primarily offices), subject to compliance with the planning
requirements. The subject has for reasons stated in the Report, potential for change of use.
16.0 Brief Comments on the Current Status of the Real Estate Market
As with most economies and housing markets, Zambia experienced significant pressure as a
result of the onset of the Covid-19 pandemic in early 2020.
Lusungu Kayela, licensee for Seeff Zambia, says that while the country did not have a
complete lockdown, schools, colleges, pubs and restaurants closed while offices
adopted remote working. Shopping malls were mostly open just for essentials. Reduced
international flights continued.
Nonetheless, it was impactful on the economy which entered a technical recession by mid-
2020 and Zambia became the first African country to default on its debt obligations.
While it has since made incremental strides in terms of economic recovery, Ms Kayela says
inflation and slow economic recovery remain a challenge for the property market. Inflation
now stands at around 11.5% (from 19.2% in 2020) and the bank lending rate around 22.75%
to 24% depending on the bank.
Medium and low-cost housing market has remained active
She says further that while the residential market is still slower compared to the pre-
pandemic period, the low to mid-market remains active, driven by young professionals.
There is also strong demand for small tracts of land and housing developments.
Although house prices initially came under pressure due to the pandemic, there has been an
element of resilience as the market received a welcome boost from returning expatriates
once the lockdown measures eased.
After a significant decline during the 2020/1 pandemic period, rentals are now stable
although the rates have declined for properties such as three-bedroomed units due to an
oversupply.
Retail and commercial property rents are stabilising at lower rates
Retailers have felt the effects of the pandemic and landlords have had to be accommodating
to retain and attract tenants. In the medium to longer-term the fast-growing population and
ever more affluent middle class is expected to favour the retail sector and drive increased
demand.
Office rentals have also stabilised. Average rates now range around USD15 to USD18/sqm
for A-grade space and USD10 to USD14/sqm for B-grade. A number of office building
projects were completed during the pandemic, which is adding stock, but demand is still
sluggish as a fall-out from the pandemic.
Although Zambia’s mainly young nation has contributed to numerous universities opening
which has driven higher demand for larger office space, demand remains weaker for smaller
office space.
Demand for prime industrial space remains low although rents have remained stable at
between USD1.50 and USD4.50/sqm per month.
Farms and agricultural properties are in demand
There is higher demand for agricultural and farming properties due to the world food
production’s current dynamics and announced shortages. This, she says, has brought
increased interest in small holdings and farms which are more affordable for novice and
budding farmers.
The interest in large farms is also growing with notable enquiries from South Africa and
Western countries with interest shown in large established farms and large portions of virgin
land. The pricing per hectare varies from USD250 to over USD5,000/ha depending on the
land and water sources, e.g. the amount of arable land, cleared or cultivated etc.
World Bank expects Zambia economy to stabilise
The World Bank considers Zambia as a stable multi-party democracy with elections held
every five years. The Bank expects economic growth to improve although it will likely only
average around 3.8 percent in the 2022-2025 period. An improving economy is always good
news for the property sector, she concludes.
Visit Seeff Zambia website for more information.
Market evidence indicates that there has been a notable decline in the overall volume of
transactions in the property market in the year 2020. This has mainly been attributed the
prevailing micro and macro-economic conditions, which include volatility of the local
currency and inconsistences in Governments fiscal policies. The situation is said to have
been compounded by the impact of the Covid-19 (Corana Virus) pandemic which has
exerted downward pressure on prices of property. It anticipated that this trend is set to
continue in the first half of 2021. Average prices for both commercial and residential
properties have declined as a result of falling rentals during the period of the pandemic.
Prices in prime areas such as Rhodes Park, Longacres, Kabulonga and Woodlands indicate
land values ranging between $300,000/acre and $450,000/acre. The current increase in
urbanisation and infrastructure development in the City is set to increase demand for land in
areas which are in close proximity such as Leopards Hill, New Kasama, Ngwerere and
Lilayi, with prices ranging between $20,000/acre and $70,000/acre.
The Bank usually expect that we brief provide a comment on the macroeconomic outlook of
the Country. In 2017, the Central Bank of Zambia reduced its benchmark interest rate by 50
bps to 10.25% and in the year 2020 the Central Bank further slashed the rate to by 125 bps
to 8% from 9.25% for the second successive this year in a bid to safeguard the country’s
financial stability and cushion the devastating effects of Covid-19 (Corona Virus) pandemic,
this is the lowest rate historically. Mortgage rates still stand in range between 20% to 30%.
In the second half of 2020, Zambia’s credit rating was lowered to CCC from CCC+ by S and
P Global ratings and assigned a negative outlook, citing default on interest payments on
existing debt and bonds. The Zambian Government has hired Lazard Freres financial
adviser to advise on the restructuring repayment period of foreign debt. The IMF forecasts
growth to rebound in 2021 to atleast 2.3%
17.0 Likely Changes in the Market Value of the Property
When commissioned to value property, including for collateral or possible sale, Banks often
request or expect advice on whether the market value of the subject is likely to change either
positively or negatively.
Despite current economic challenges, demand for serviced development land and developed
property in all parts of Lusaka and areas in close proximity in general, and for residential
and commercial properties in easily accessible locations in particular, is high. For areas
such as Rhodes Park, Northmead and Longacres, high prices continue to be paid for
properties which become available or which have development potential. A sustained high
demand over the past several years for sites has led to substantial increases in prices.
Limited availability of land for development is compounded by Government’s bureaucratic
and lengthy land administration and delivery system, because even though sites with
development potential can be rezoned and subdivided for commercial or residential
occupation, the process is lengthy and cumbersome. The result is that plots which are
available for re-development remain in short supply, leading to high prices for property
offered for sale, even during times of economic difficulties.
Considering the location, type of accommodation, the extent of the property, the purpose for
which the premises are held; as well as current demand for residential accommodation, we
are of the opinion that the market value of the subject, like for many properties in Rhodes
Park, is likely to increase in real terms, or remain stable in the foreseeable future.
18.0 Method of Disposal of Assets
We are often requested to advice, assuming the property was to be sold, on the most
appropriate mode of disposal (auction, private treaty, tender, etc), recommending the mode
likely to achieve a sale approximately at the market value.
As is in any disposal, the best approach in achieving the best possible price is to market and
advertise widely, placing appropriate notices in relevant publications, and also by direct
contact with potential buyers. A reasonable period should be allowed for marketing in order
to expose the assets adequately to potential purchasers.
The nature of the property makes it inappropriate to sell by auction. Sale by auction would
tend to achieve very low prices as most bidders would try to be vulturous, and will be
looking for bargains.
The appropriate method would be private treaty, with tender being the next best approach.
Our opinion of market value of the property is based on the assumption that the sale would
be on the basis of a willing seller willing buyer arrangement. Whether by private treaty or
tendered, we are of the view that it is preferred that potential buyers are adequately advised,
and prices offered can tend to be in the region of the figure for the market value which we
have suggested.
In a disposal of property such as the subject, costs of sale would depend on the extent of the
seller’s instructions and the time frame specified for conclusion of the disposal and transfer
of title. It is virtually impossible, in the absence of instructions and a full and detailed
estimate, to quantify costs.
Likely costs would include, but not limited to:
(1) expenses of taking client’s instructions
(2) costs of making inquiries with relevant authorities
(3) costs of preparation of sales particulars
(4) costs of marketing, including expenses of taking potential buyers to view the assets
(5) expenses of reporting to client
(6) legal fees and ancillary expenses; agent’s fees and commissions
Because of the foregoing, we believe that the property can sell easily on the open market and
in the event of a decision to sell, enough time should be allowed for proper marketing, that
publicity and market exposure ought to be adequate, as opposed to a situation of “forced
sale” where the period and promotional measures necessary to achieve the best price in the
market would be unduly short. A period not exceeding two months would be adequate to
market the subject, identify a purchaser and conclude a sale. We believe that as a guide,
total cost of disposal, excluding taxes would be in the region of 15% of the realisable price.
19.0 Opinion of Values

Subject to the assumption made, we are of the opinion that for purposes of collateral, values
of the property and improvements, would be as follows:
(i) Open Market Value: K9,560,000
(Nine Million, Five Hundred and Sixty Thousand Kwacha)
(ii) Forced Sale Value: K7,650,000
(Seven Million, Six Hundred and Fifty Thousand Kwacha)
(iii) Open Market Rental Value: K12,000
(Twelve Thousand Kwacha) per calender month
(iv) Estimated Replacement Cost: K3,120,000
(Three Million, One Hundred and Twenty Thousand Kwacha)
20.0 Market Comparatives at Arriving at the Rates
Although there has been increased activity in the Rhodes Park/Fairview Area, sale of
property can relatively speaking, still be described as limited; and not many sales area
reported openly. In assessing market and other values, we have relied on evidence of
various sales and rentals transactions, including the following:
Site Sale Price

Property Location Description
(Acres) (US Dollars)
Stand No. 1216 Mukonteka Close, off Dwelling House
Addis Abba Drive, and Swimming 0.2452 US $750,000
Rhodes Park Pool
Nangwenya Road off Dwelling House,
Addis Abba Drive, Cottage, Servant’s
Stand No. 12527 0.1942 US $500,000
Rhodes Park Quarter and
Swimming Pool
Makishi Road, off Dwelling House,
F284a/92 Church Road, Rhodes and Servant’s 0.2048 US $350,000
Park Quarter
Makishi Road, off Great Dwelling House,
Stand No. 1221 East Road, Rhodes Park Cottage and 0.2840 US $450,000
Swimming Pool
Property/Location Brief Description Rentals Passing

US$ 2,000 per month for the
Dwelling House, Cottage,
Stand No. 3052, Makishi Road, Main House and Servant’s
Servant’s Quarters and
Faiview Area Quarters
ancillary structures
US$ 650 for the Cottage
F284a/112, Masansa Close, 6No double storey flats, each US$ 1,200 per month for
Rhodes Park 3 bedrooms, with good fittings each unit
Near the International School of
Dwelling House, Swimming
Lusaka, Nangwenya Road US$ 2,000 per month
Pool, Servants Quarters
Rhodes Park
Stand No. 3049 Makishi Road, Main Dwelling House, 2No US$ 1,650 per month for
Main House
Flats/Dwelling Units and
Faiview Area US$ 600 per month for each
ancillary structures
of two Flats sited at the rear
21.0 Age and Condition of Structural and Electrical Components

21.1 Age and Condition
We have not inspected parts of the property or buildings which are covered, unexposed or
inaccessible, nor have we tested service installations. Due to time and cost implications, it is
not standard practice to undertake structural surveys or detailed examination of services
when assessing market, rental or forced sale value of a property, unless evidence or
circumstances dictate. However, based on our inspection conducted as earlier described, we
note that buildings were originally constructed to a good standard of work-manship but
structures have not been maintained, and are in poor condition with various defects apparent.
As regards the age and expected life span of these installations, structures were built in the
late 1950’s. Buildings and service installations are of basic design, and due to limited or no
maintenance, structures are ripe for demolition.
21.2 Carrying Out Immediate Repairs

Buildings can suffer different types of defects, either structural or of a minor nature. The
latter require only routine repair and maintenance, such as repainting, fixing of leaking taps
or replacement of small items such as electrical fittings, broken window panes or various
pieces of iron mongery. On the other hand, structural defects are those that may affect the
stability and safety of a building; examples include structural cracks, sinking foundations,
defective electrical installations and termite infestation.
As mentioned above, buildings are in a poor state, due to lack of maintenance; structures
require complete refurbishment or ideally, redevelopment of the site.
22.0 Buildings’ Useful Economic Life

We are often requested that we advise if the buildings and improvements on the property can
retain a useful economic life covering the term of a credit facility. However, in almost all
cases, the period of the loan is not been disclosed.
The buildings and service installations at the premises were built in the late 1950’s.
Although originally constructed to a good standard of workmanship, structures, fittings and
finishes have not been maintained and are now in a poor state with various defects apparent.
We are of the view that improvements have reached the end of their useful economic life.
We might add, considering the extent of the site, it location, demand for commercial
accommodation as well as the prevailing state of the economy and supported by the fact that
several sites in close proximity originally developed for residential use have been converted
to commercial use; the economic value of the, the site is much higher than that of existing
structures, improvements have outlived their economic usefulness.
23.0 Taxes, Legal and Other Charges

We have not made allowances in our valuation for:
(i) any tax or statutory liability, whether existing or which may arise in connection with
the property;
(ii) arrears of ground rent or similar charges, if any, arising under the terms of the statutory
lease;
(iii) arrears of property rates or charges due, if any, to the City Council;
(iv) payment of arrears, if any, for services supplied to the property, including water and
electricity; and
(v) legal or other charges which may be incidental to the sale of the subject or settlement of
matters connected thereto.
24.0 Sources of Information

We accept as being complete and correct the information provided to us by the various
sources, as to details of tenure, land use, services, planning consents and other related
matters summarised in our Report. These sources include:
(i) the Occupants of the Property;
(ii) Ministry of Lands, Lusaka;
(iii) Lusaka City Council; and
(iii) Property Consultancy Firms and Real Estate Agents.
25.0 Summary of Assumptions and Limitations

Our opinion of market value is prepared on the assumptions and limitations summarized
below. In the absence of information that adversely affect the property; these assumptions
and limitations are usual; and do not negatively impact on the valuation.
(i) information provided to us by various parties is complete and correct in all respects;
but we assume that where appropriate, advice will be sought to confirm the accuracy of
these details.
(ii) a soil survey of the site or structural survey of buildings and improvements is beyond
the scope of our instructions; we cannot therefore give any guarantees in this respect.
(iii) boundaries are established and clearly defined, and there are no encroachments or
boundary disputes with adjoining sites.
(iv) inspection of parts of the property and improvements that have not been inspected
would neither reveal material defects nor cause the Valuation Surveyor to alter the
valuation materially.
(v) the property is developed and improvements constructed in accordance with valid
statutory consents and building regulation approvals, to the full satisfaction of the
Authorities.
(vi) a good and marketable title can be shown; and there are no onerous or unusual
outgoings or encumbrances likely to have an adverse effect upon the market value of
the premises.
(vii) all documentation relating to the property is satisfactorily drawn and there is no
material litigation pending.
(viii) no deleterious or hazardous materials were used in the construction of buildings or
have since been incorporated.
(ix) no contamination or potentially contaminative use has ever been carried out on site or
on adjoining properties.
(x) an appropriate and adequate insurance policy has been obtained, and that there are no
acts or omissions on the part of the insured or the occupants of the premises which
would render the policy void or voidable.
We wish to mention that we are not aware of any variance between information we have
obtained from searches and inquiries made and facts relating to the property, and further; we
have no reason to believe that information provided by various sources, including the
Occupants of premises, the Ministry of Lands and the City Council is inaccurate. However,
should we subsequently become aware that any of these or other assumptions are incorrect,
we may choose to revise our opinions accordingly, and if need be, advise the Addressees.
26.0 Publication
Neither the whole nor any part of this Report, or any reference thereto, may be reproduced
or included in any published document, circular, advertisement or statement without the
prior written agreement of the Valuation Surveyor as to the form and context in which it
may appear.
27.0 Certification
I, Musonda Sakeni KASASE, do hereby certify as follows:-
(a) that we have inspected the property and considered relevant factors affecting its market
and other values;
(b) that I and Anderson + Anderson Valuation Surveyors have no undisclosed or
contemplated interest in the property valued, either at the present time or in the future;
(c) that I have relevant experience and knowledge required to value this type of property in
this locality;
(d) that I am a qualified Valuation Surveyor and licensed to practice by the Valuation
Surveyors Registration Board in accordance with the Valuation Surveyors Act, Cap.
207 of the Laws of Zambia.
28.0 Confidentiality
The Report and values are provided for the stated purpose and for the sole use of Indo-
Zambia Bank Limited to whom it is addressed. The information and opinions are
confidential to the Bank and Simmer Enterprises Limited and their professional advisers in
this matter. Consequently, Anderson + Anderson Valuation Surveyors and its employees
accept no responsibility whatsoever to any other party, for any loss or financial obligation,
direct or consequential, which might arise from reliance on the Report or any part of its
contents.
If however, our opinion of values are disclosed to persons other than the Addressees and the
Owners of the property, then the bases of valuation and assumptions made, as well as
exclusion clauses contained in the Report should also be disclosed in full.
We trust the Report will be useful, but should anything further be required or if there are points to
be clarified, please let us know.
Yours faithfully
ANDERSON + ANDERSON VALUATION SURVEYORS
M. S. Kasase
PRINCIPAL CONSULTANT

3AA - 4551 Final Report Nov 2020

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ANDERSON + A N D E R S O N VALUATION SURVEYORS

REPORT AND VALUATION

INDO - ZAMBIA BANK LIMITED

Items Excluded: Moveable items, including household furniture and equipment.

Services: Mains single phase electricity is connected.

(i) to assess market value

(ii) to assess rental value

(iii) to assess forced sale value

(iv) to assess replacement cost

(a) Rhodes Park Area

(b) Location and Accessibility

(c) Extent of the Property

(d) Proximity to Social Facilities

(e) Demand for Development Land

3rd December 2020

Head – Credit Department

Re: VALUATION OF STAND No. 4551, RHODES PARK, LUSAKA

1.0 Purpose of Valuation

2.0 Interpretation of Instructions

3.0 Format of the Report

4.0 Property and Assets Valued

5.0 Inspection of the Property

5.1 Date of Inspection

5.2 Extent of the Inspection

5.3 Floor Areas

5.4 Property Boundary

6.0 Description of the Property and Improvements

6.1 Physical Location

6.2 Legal Description

6.3 Site and Fencing

6.4 Land Use Classification

6.5 Title and Ownership

6.6 Occupation of the Property

6.7 Charges/Mortgages and Caveats

6.8 City Council Rating Assessment

6.11 Brief Description Buildings and Accomsmodation

(ii) Servants’ Quarters

Accommodation (which is in very poor state) comprises bedrooms, living room,

(iv) Pump Room

6.12 Floor Areas

6.13 Condition and State of Repair

7.0 Other Key Factors Usually Requested by the Bank

7.2 Details on Internal Improvements of Buildings

7.3 Copy of Official Search

7.4 Site Plan Identifying Building/Accomodation Layout of the Valued Property

7.6 Outstanding Land Rent and Property Rates

7.7 Assumptions and Limitations

8.0 Planning and other Building Consents

9.0 Highway and Other Development Proposals

10.0 Contamination, Pollution and Environmental Considerations

11.0 Site Conditions and Flooding Risks

12.0 Approach to Assessment of Values

12.1 Valuation Methodology

Property Value by Market Comparison would be appropriate if the assessment is intended to

12.2 Classification of the Property

12.3 Valuation Considerations

(vi) current construction costs of various types of residential buildings, as well as

12.4 Property Risks

13.0 Bases of Valuation

13.1 Open Market Value

13.2 Open Market Rental Value

13.3 Lease Terms Assumed in Assessing Rental Value

13.4 Estimated Restricted Realization Price

13.5 Comment on Assessment of Forced Sale Value