At the end of 2020, we received an interesting project, which was a whole SkyPoint business park. It is located near Sheremetyevo International Airport. In mid-June 2020, the owner filed an administrative claim challenging the cadastral value of part of the buildings of the business park and the land on which they are located.
SkyPoint is a business park, consisting of three B+ class business centers and two hotel complexes (hotel Sheraton Moscow Sheremetyevo Airport Hotel 4* and the hotel SkyPoint 3*), united by one territory. Despite the fact that it was put into operation back in 2010, until now, this commercial real estate object can safely compete with business centers in its class. Although the object is located outside the Moscow Ring Road, its location belongs to the territory of Moscow, and most importantly, it is located in close proximity to the airport. This led to high specific indicators of cadastral value, exceeding the indicators of comparable objects in the coverage area.
The Moscow City Court ordered a re-evaluation examination of our company due to the fact that the administrative plaintiffs did not agree with the results obtained by the initial examination. They prepared objections to the initial examination, indicating violations of the methodology of the valuation, as well as the incompatibility of the average market data used by the expert with the actual performance indicators of the business park. At the same time, the plaintiffs' objections concerned only one of the buildings on the territory of the complex, the cost of which, in their opinion, was overvalued. Objections were also filed by representatives of the Moscow City Property Department, who, for their part, believed that there were errors in the examination. In their opinion, they led to an underestimation of the value of real estate, while the Department asked the court to appoint a re-examination of all the objects of the study.
After analyzing the documents available in the case file, it became obvious that during the study, the expert did not request not only information about the operating activities of hotels and data on the rental income of SkyPoint business centers, but also a personal inspection of the territory was not carried out. It is worth noting that conducting an inspection is not a prerequisite for performing a forensic examination, especially when a sufficient amount of necessary information is provided in the materials. However, in this case, without it, it is impossible to properly identify all the valued objects, define their quantitative and qualitative characteristics. Also, considering that in addition to the disputed objects on the territory of the park, there are also other real estate objects that were not reflected in the initial examination, the neglect of the inspection just led to errors in calculations.
In order to establish the actual performance indicators, we requested data on the operational indicators of the hotels and information on the actually concluded lease agreements of the business park. Also, technical documentation was attached for all real estate objects located on the territory to establish the exact size of the leasable areas of business centers and the volume of hotel rooms. The information provided by the owners made it possible to compare the actual figures with the average market figures and, as a result, confirm the results we received.
The market value of the disputed objects was determined within the framework of a income approach. Business centers were estimated by the direct capitalization method, and hotel complexes, according to international practice, by the capitalization method according to the general rate of return on capital. The cost of the land plot was determined within the framework of a comparative approach (sales comparison method). For its implementation, there was a sufficient amount of market information on the sale of similar plots. Also, a distribution method was used, the final result of which was presented in the form of a cost range confirming the results of the comparative. However, it was not taken into account during the approval due to the peculiarities of the location and qualitative characteristics of the studied land plot, which have a negative impact on determining the value of the share of land in the value of a single real estate object.
The results of our examination showed an overestimation in the framework of the primary examination of the cost of capital construction facilities, while the price of the land plot, according to the results of the re-examination, was determined slightly higher. The difference between the total results of the primary and repeated examination was slightly more than 10%, however, taking into account the scale of the complex, this slight deviation in absolute figures exceeds 200 million rubles.
The plaintiff agreed with the results of the examination and clarified the requirements. The defendants disagreed with the results of the forensic examination, however, they did not provide any reasonable arguments, except for such ridiculous ones as the alleged need to take into account non-rental (auxiliary) areas in income, as well as the lack of analysis of collateral agreements and the value of the collateral value.
When making a decision on the case, the court of first instance distributed the costs of the examination in a different way than in the determination of its appointment. At first, since both sides requested the examination, the costs were distributed equally. After the final decision was made – the court took into account the materiality of the deviation of the market value from the cadastral value, and since the decrease in the cadastral value was less than 30% (according to the experience of established judicial practice – insignificant) – the costs were fully charged with the administrative plaintiff.
As both the plaintiff and the defendant disagreed with the decision, they filed appeals. The Court of Appeal found no errors in the conducted forensic examination, and agreed with the position of the Moscow City Court on the allocation of costs, thus leaving the decision of the court of first instance unchanged in full.