DEPARTMENT OF ESTATE MANAGEMENT

College of Environmental Studies

Hussaini Adamu Federal Polytechnic, Kazaure
FORTH SEMESTER EXAMINATION, 2017/2018 SESSION
Class; ND II Estate Management
Course; VALUATION (EST 221)
Time allowed; 3 HOURS
Examiner; A.A YAKUB
Instruction; Making necessary assumptions and taking all RENTS to be NET INCOMES,
attempt question 1 and any other four (4) questions

Question 1.
a. Zilai Babadidi owns a freehold interest in a warehouse in Shangwam, which is held by
Titilayo Nuratu on a 21-year leasehold term since 2010.
The rental value of the premises is half a million while the rent under the lease is 90% of
the FRV. Value Babadidi’s interest.
b. In 2009, there was a transaction between ND 2 students where AbdusSalam Iliya
granted a 25-year lease to Blessing David a rent of N3.2m p.a. while similar properties
commands N3.7m p.a
Value Blessing’s interest.
c. Nura Nasir Abubakar intends to celebrate his grandfather’s remembrance in the year
2024 at a cost of N725,000. What sum should he set aside today @5% investment rate?

Question 2.
a. What is virtual rent?
b. Differentiate between virtual rent and rent reserved
c. Madam Jennifer Chiamaka Valentine just took occupation of a property in Nomans Land
where she intends to run a restaurant business. It is estimated that she would spend a
sum of N 125,000 on accumulated repairs and pay a premium of N150,000 in the 8th year
of the lease which is expected to last a period of 30 years.
Calculate the virtual rent on the property which is let @N500,000 p.a while similar
properties commands a FRV of N550,000 p.a

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Question 3.
Blessing David holds a land on terms equivalent to a freehold interest, which consists of a
large shopping space measuring 30m on the frontage and 21m depth in Kaduna. The property is
vacant and ready to let.
Recently, shop property in the vicinity measuring 25m frontage and 28m depth was let for
N800,000p.a. Taking Sinking Fund @3% and Leasehold interest @7%, Value Blessing Davids
interest

Question 4.
10 years ago Emmanuel Chikelu, the absolute interest holder in a property located in Abakwa
granted a 50 year building lease to Simon Emem at a ground rent of N20,000pa. Simon
erected the building 8 years ago and granted a term of 25 years to Jibrin Musa at
N300,000p.a on FRI terms.
5 years ago Jibrin Musa sublet the property to Murtala Adamu for a term of 10 years at a
rent of N450,000pa on the same term.
The current Net Rental Value of the property is N500,000pa. Assuming a freehold rate @7%,
Value the various interests.

Question 5.
A property located in a good location was let 4 years ago on a lease of 42 years to Olayinka
Ifeoluwa Abosede on FRI terms. The rent reserved for the 1st 7 years is N150.000 p. a, then
N200,000 p.a for the next 7 years, N260,000 p.a for another 7 years and N300,000 p. a for
the reminder.
If the FRV is estimated at N330,000 p.a, value the freehold interest in the property
adopting a 7.5% FH rate.

Question 6.
a. Malam Z. M Zaid, an absolute interest owner leased out his property to Mallam A.O
AbdulFatai at an annual rent of N150,000 p.a in 2016 and he presently has a 15 year
unexpired term.
Value Mallam Zaids interest without the use of the valuation table assuming an interest
rate of 6% and FRV @N170,000p.a
b. ESV S.D Gimba is a freeholder of a property situated in Osun state. Similar properties
within the neighbourhood commands N203,000 p.a in the property market.
Without the use of the valuation table, Value his interest assuming a FH rate at 7% and
SF at 2.5%

Question 7.
Explain your understanding of the following;
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 i. Rack rental value iv. Outgoings
ii. Profit rent v. Surrender and renewal of leases
iii. Premium

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