Valuation Services

Client: Lord Howe Island Board

Land Valuation

Encroachment of Land Capella South

Lagoon Road,

Lord Howe Island NSW 2898

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Table of Contents

INTRODUCTION ....................................................................................................... 3

INSTRUCTIONS ....................................................................................................... 3

INDEPENDENCE OF VALUER ................................................................................ 3

DATE OF INSPECTION ............................................................................................ 3

DATE OF VALUATION ............................................................................................. 3

LOCATION ............................................................................................................... 4

TITLE PARTICULARS .............................................................................................. 4

IDENTIFICATION ..................................................................................................... 4

LAND DESCRIPTION ............................................................................................... 4

TOWN PLANNING.................................................................................................... 5

SUBJECT IMPROVEMENTS .................................................................................... 6

ENVIRONMENTAL ISSUES ..................................................................................... 6

LORD HOWE ISLAND BOARD POLICY .................................................................. 7

VALUATION METHODOLOGY ................................................................................ 7

VALUATION ............................................................................................................. 8

DISCLAIMERS ......................................................................................................... 8

Inclusions

ANNEXURE A – LOCATION MAP

ANNEXURE B – SITE PLAN

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INTRODUCTION

Instructing Party: Lord Howe Island Board This Report is Prepared on Behalf of: Lord Howe Island Board PO Box 5, Lord Howe Island NSW 2898 Refer: Dave Kelly Manager - Environment & Community Development Lord Howe Island Board

INSTRUCTIONS The Lord Howe Island Board, LHIB, requests market valuation advice in respect to the transfer of Crown land from the LHIB to the adjoining Perpetual leaseholders of JW and HJ Baillie. The purpose of this report is to provide an assessment of the market value of the subject land.

INDEPENDENCE OF VALUER I hereby certify that the valuer and the valuation firm do not have any direct, indirect or financial interest in the property or client described herein.

DATE OF INSPECTION

3rd December 2014

DATE OF VALUATION

3rd December 2014

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LOCATION

The subject land is located off the eastern side of Lagoon Road approximately 150 metres south of the “T” intersection with Mulley Drive, Lord Howe Island. The site adjoins the tourist accommodation unit complex of “Capella Lodge”, surrounded by sparsely populated low-density housing with the Lord Howe Island Golf course located nearby to the north and rural lands to the south and east. The subject property is situated approximately 3 kilometres south by road of the Lord Howe Island Board Administration Centre and 3.75 kilometres south of the Lord Howe Island Post Office. Refer to Annexure A – “Location Map”

TITLE PARTICULARS

The subject land forms two separate sections comprising:

1. Part Portion 176 in Lord Howe Island Plan 143

2. Part Portion 123 in Lord Howe Island Plan 81R

Refer to Annexure “B” – Site Plan

IDENTIFICATION

The subject land have been identified by visual inspection in consultation with the relevant Lord Howe Island location map and a site plan that has been annexed to this report.

LAND DESCRIPTION

As per your instructions and site plan provided, the subject land totals 951 square metres. This site area is made up of;

1. Part Portion 176 in Lord Howe Island Plan 143 48 square metres

2. Part Portion 123 in Lord Howe Island Plan 81R 903 square metres

Total 951 square metres

Refer to Annexure B – Site Plan

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TOWN PLANNING

The subject land, as at the date of valuation, is located within an area zoned No. 2 “Settlement” under the Lord Howe Island Regional Environmental Plan 2010.

Excerpt of the Lord Howe Island Local Environmental Plan 2010

(Sheet 2 of 3 sheets)

LORD HOWE ISLAND LOCAL ENVIRONMENTAL PLAN 2010 - REG 14 Zone 2 Settlement

1) The objectives of Zone 2 Settlement are as follows:

a) to provide opportunities for limited residential and commercial development that maintains the dispersed housing pattern of the settlement area and is in sympathy with existing development in relation to the following:

i. setbacks, ii. building mass and style, iii. visual amenity, iv. landscaped character,

b) to ensure that any development is only permitted in locations where, in

the consent authority’s opinion:

I. the development will not involve unacceptable infrastructure costs for the Board or the community of the Island, and

II. there is an adequate area available for the treatment or disposal of any effluent arising from the proposed development by an appropriate effluent treatment or disposal system, and

III. the land is capable of supporting the proposed development and is suitable in terms of the land’s physical constraints (such as vulnerability to erosion, slip or flooding), and

IV. the development (including any effluent treatment or disposal system referred to in subparagraph (ii)) will not adversely affect groundwater quality,

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c) to avoid or minimise environmental damage and protect areas that:

i. comprise significant habitat for species of animals that are native to the Island, or

ii. have significant native vegetation.

2) Except as otherwise provided by this Plan, development for the purposes of home businesses or vegetation restoration may be carried out on land within Zone 2 Settlement without the consent of the consent authority.

3) Except as otherwise provided by this Plan, any other development may be carried out on land within Zone 2 Settlement only with the consent of the consent authority.

This information has been obtained from information supplied by the Lord Howe Island Board and must be confirmed by sighting a Certificate under Section 149 of the Environmental Planning and Assessment Act 1979.

SUBJECT IMPROVEMENTS

This valuation disregards any structural building improvements made on, or over, the land.

ENVIRONMENTAL ISSUES

The sites previous and present use would indicate that contamination is very unlikely though I would stress that I am not an expert in this field and this valuation is subject to a qualified site contamination study being carried out. I have not inspected any contamination registers nor sighted an Environmental Audit. On inspection it did not appear that affectation to the soil or vegetation from contaminants was evident and the risk of any future affect minimal due to the continuation of the residential use and the Islands World Heritage Listing. If the property were affected by any findings, this valuation should be requisitioned for comment and review.

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LORD HOWE ISLAND BOARD POLICY

As per the Lord Howe Island Boards "Disposal of Land Assets" policy Crown Land that is to be disposed shall be valued by the Valuer General in accordance with the requirements of the Lord Howe Island Act, 1953. The transfer of all Crown Land shall only be at the value determined by the Valuer General in accordance with the Lord Howe Island Act. The Board shall not recommend to the Minister to approve the transfer of Crown Land at a value less than that determined by the Valuer General except in accordance with Section 6 of the relevant policy.

VALUATION METHODOLOGY

As per your instructions, valuation advice is requested for a market value in respect to the subject land as at the date of valuation. Market Value is defined as,

”The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

In determining the current market value of the subject land I have had consideration that;

The only likely, and potentially, only purchaser of the subject two separate sections of land is the adjoining owner purchaser,

The subject land is to be incorporated into the adjoining Capella Lodge tourist accommodation complex,

The site area of the subject land cannot support development in its own right for residential or commercial use.

From sales evidence, it is considered that the value of residential/commercial used land within this location is approximately $115/m² of site area. Having regard to the lands shape, size and very limited development ability from the residential/commercial site area rate value I have deducted 75%, i.e. the subject land value is considered to be $28.75/m² of site area.

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Furthermore, if land cannot support development on its own right or cannot be sold freely on the open market, as there are possibly only one or two potential purchasers, then it is necessary to discount the rate of land in the market place. Therefore in calculating the valuation on a rate per square metre basis further discount to the land must be given having regard to the abovementioned restrictions. For this I have allowed a further deduction of 50%, i.e. the subject land value is considered to be $14.50/m² of site area, as rounded. Therefore; Site Area: 951m²

Site Area Rate: $14.50/m²

951m² @ $14.50/m² = $13,790 as rounded This valuation methodology is one that has been undertaken and accepted on other adjoining land purchases with similar inherent characteristics on Lord Howe Island.

VALUATION

It is considered the current market value of the subject land, as outlined within this report and as at the date of valuation, is considered to be Thirteen Thousand, Seven Hundred and Ninety Dollars, ($13,790.00), exclusive of GST.

Derek Hill, FAPI Certified Practicing Valuer Registered Valuer No. 3102 Valustate Pty Ltd

DISCLAIMERS

This report is for the use of and may be relied upon only by the party to whom it is addressed. No other party is entitled to use or reply upon it and the valuer shall have no liability to any party who does so. This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three months from the date of the valuation, or such earlier date if you become aware of any factors that have any affect on the valuation.

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LOCATION MAP

ANNEXURE “A”

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SITE PLAN

ANNEXURE “B”

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