PropLens · 13 Harbour Road, Inverness, Highland, IV1 1SY

Offer range · Income hold (vacant to relet)

£205,000

Asking (auction guide)

Step down +£160,000 · −−78% to reach 15% cash-on-cash

£365,000

TargetUpper end · 15% c-on-c hurdle

vs asking

−−78%

Step down −£75,000 · −21% to reach 20% cash-on-cash floor

£290,000

Lower end · 20% c-on-c floor

vs asking

−−41.5%

Range £290,000 – £365,000 Bid band · Below range asking sits below methodology floor

Sanity flags

Asking £205,000 sits below the methodology lower bound of £290,000. Asking is materially cheap on the single-let income lens; this either signals an auction-guide loss-leader, undisclosed tenure or fabric defects, or a constrained vendor. Verify by DD before assuming the gap is real value.

Stabilised income

£67,722/ yr NOI

£67,722 ERV − Stabilised single-let, FRI assumed op. costs → NOI

Stabilised single-let conventional FRI at Edozo Inverness £9.47/sqft × 7,152 NIA. Stabilised assumes 12mo void plus 6mo rent-free already absorbed in VP.

Cost to stabilise

£178,800one-off refurb

£25/sqft Light cosmetic refresh × 7,152 NIA

Funded with the purchase — already in equity required on the explorer.

Offer explorer

Your offer

£365,000

Equity required

£0

Lender lends £253,500 against VP £390,000

Cash-on-cash

DSCR @ 8%

3.34×

Same at any price

Net cash flow

£47,442.288

NOI − debt service (fixed)

Lender lens · five ratios

DSCR @ 8% rate 3.34× Strong

Stress DSCR @ 10% rate 2.67× Strong

Debt Yield (NOI / Loan) 26.7% Strong

Yield on Cost 0% Viable

Net Initial Yield 0% Viable

65% LTV · 8% IO · 7% costs · NOI £67,722.288 · VP £390,000 (lender basis) · Refurb-to-let £178,800 (£25/sqft Light cosmetic refresh × 7,152 NIA)

Thesis

13 Harbour Road is a vacant 7,152 sqft commercial unit on the Telford Retail Park, Inverness, sat between Halfords, M&S Simply Food, Arnold Clark, and BP. Asking £205,000 via auction guide implies £28.66/sqft acquisition, materially below the single-let income-lens methodology range of £290,000 to £365,000. The gap is large enough to warrant a careful explanation: either the auction guide is a loss-leader designed to generate competitive bidding, the tenure carries restrictions not visible from the listing, or fabric and EPC issues exist that the price reflects. None of these are knowable without the auction pack and a building survey.

On a conventional single-tenant relet at Edozo Inverness 4,000+ sqft median rate (£11.14/sqft) condition-adjusted to £9.47/sqft, the stabilised NOI of £67,722 per annum produces a strong lender lens at any price near asking. The deal pencils as an income hold if the lease-up assumptions clear DD. Multi-let upside is presented separately in multilet.html; the operator case carries materially higher refurb capex (£55/sqft cellular subdivision) and is not supported by paying asking on the operator lens alone.

What's wrong with it

NIA undisclosed in structured data (76,983 figure in extractor output is invalid; only the photographed "TO LET OFFICE 7,152 ft²" signage is load-bearing). Measured-survey verification is essential before bidding.
Tenure undisclosed. Most Highland trade-park units are heritable, but a long leasehold with onerous ground rent or service charge would materially change the methodology.
Auction-guide pricing carries the risk of a reserve materially above the guide and undisclosed pack-level disqualifiers (planning notices, structural issues, EPC E or below).

What's right with it

Strong micro-location: Telford Retail Park anchored by Halfords, M&S Simply Food, Arnold Clark Volvo, BP, Anytime Fitness, totalling 33 nearby businesses, 13,532 reviews, 4.21 average rating, activity score 100/100.
Inverness fundamentals: Green Freeport designation, £25m seed capital, A9 dualling, Inverness Castle Experience opened December 2025, HIE-documented flex workspace shortage.
Recent internal refit visible from photos: clean carpet, modern tea-point fit-out, freshly-painted walls. Light cosmetic refresh sufficient for relet; no major capex needed under the single-let lens.

Risks

Lease-up risk: 12 months void plus 6 months rent-free is the methodology assumption. A weaker Highland mid-sized office market could extend either, pushing stabilised NOI back by a quarter or more.
Covenant on the eventual tenant unknown. Auction sales typically clear within 28 days; if the buyer relets to a weaker covenant, the T&R value erodes.
Capex contingency: the £25/sqft Light refresh budget assumes the existing fit-out is genuinely lettable. A measured survey or M&E inspection may surface costs the photo set does not.

DD gaps

NIA: stated 76,983 is an extractor error. Verified figure must be measured (IPMS3 or NIA per RICS Code of Measuring Practice) from the auction pack or a measured survey.
Tenure: heritable vs long leasehold. If leasehold, ground rent / service charge / lease length all material.
Rateable Value, EPC band, planning history, and any title burdens (servitudes, real burdens, deeds of conditions) — standard auction pack items.

Considerations

Auction-guide pricing: the £205,000 is a guide, not a reserve. The reserve may be materially higher; bidders should target the auction-pack reserve disclosure or assume the guide is 70-90% of vendor expectation.
Property is one unit on a multi-tenanted retail park. Service-charge regime, shared-area maintenance, and signage rules likely governed by an estate document.
VAT election unknown. Highland trade-park units are frequently elected; LBTT computation in the methodology assumes a standard transaction.

SSAS variant (50% LTV): Loan £195,000. Range tightens to £260,000 to £340,000. Rental income and capital gains tax-free within the SSAS wrapper. Loan size sits at the small-ticket boundary; specialist lender may be required.

Quick facts

Asking: £205,000 (auction guide)
NIA: 7,152 sqft
£/sqft asking: £28.66
Tenure: Not stated — DD gap
Condition: Fair
RV: Not disclosed — DD
Lease: Vacant
Portal: Rightmove
Agent: Town & Country Property Auctions

Headline numbers

Range: £290,000 – £365,000
Discount to upper: +78.0%
Stabilised NOI: £67,722
Refurb to let: £178,800
All-in @ upper: £569,350
DSCR @ 8%: 3.34×
VP value: £390,000
MV1 stabilised: £531,155

Property & Valuation

Facts, condition, comparables, valuation stack, and purchase-cost schedule for due-diligence reference.

Facts

Address	13 Harbour Road, Inverness, Highland, IV1 1SY
Postcode	IV1 1SY
Jurisdiction	Scotland
Asking	£205,000 (auction guide)
NIA (verified from photo signage)	7,152 sqft
NIA (as extracted)	76,983 — extractor error, do not use
£/sqft asking	£28.66
Property type	Commercial unit (trade-park office / mixed use)
Tenure	Not stated — DD gap
Condition	Fair (default; no listing text triggers another rating)
Portal	Rightmove
Agent	Town & Country Property Auctions (auction guide)
Listing description	Not captured (extractor returned null)
Brochure	Not attached
Floor plan	Not attached
EPC	Not stated — DD gap
Rateable Value	Not stated — DD gap

Photos

Physical assessment

Exterior: modern black vertical metal cladding, ~2010s build, prominent street-frontage glazing on ground floor. Estate signage and tenant branding visible on neighbouring units.
Ground floor: trade/retail space with full-height glazed shopfront, blue roller doors visible (loading). Photos show neighbouring occupiers Scotonomi sportswear, Hydropool hot tubs, and Scotkilt; the subject unit appears vacant.
First-floor office: large open-plan floor plate (photo 03), recently re-carpeted, freshly painted, multiple structural steel columns. Doors visible in background suggest some cellular ancillary rooms.
Tea-point / kitchen: modern beech-effect units, stainless-steel sink, electric radiator heating. Photo 04 shows clean, lettable condition.
M&E: visible radiator heating in kitchen and office, suspended ceiling with grid lighting, presumed standard small-power and data infrastructure. No specialist M&E visible.
Access and parking: estate-wide parking visible in front, set back from Harbour Road. No dedicated parking visible for the subject unit; presumed shared estate parking.
Surroundings: high-quality trade-park context — Halfords, M&S Simply Food, BP, Arnold Clark Volvo, Anytime Fitness, Subway, Pepe's, Cotswold Outdoor all within 500m. No visible vacancy in the photos of neighbouring units.
Visible issues: none apparent from the photo set. EPC, asbestos, and condition survey items are DD gaps.

Per-unit income

Source	Area	Rate	Annual
Single-let conventional FRI	7,152 sqft	£9.47/sqft	£67,722
Stabilised NOI (post-void, post-rent-free)			£67,722

Edozo Inverness 4,000+ sqft band median £11.14/sqft (HIGH confidence, 5 mid-size comparables). Condition Fair = ×0.85 = £9.47/sqft. No micro-location discount applied to single-let (Edozo town median already reflects mix).

Yield selection

Inverness/Highlands Office Secondary range from references/yield-selection-guide.md: 11-14% (midpoint 12.5%). Industrial Secondary: 10-12% (midpoint 11%). The unit is a mixed retail/office trade-park asset; industrial-yield midpoint chosen as it best reflects the drive-to context and tenant mix in the vicinity. Sub-£500k lot-size adjustment: +175 bps. Final ARY: 12.75%.

Yield scenario	ARY	Implied capital value at £67,722 NOI
Optimistic (prime industrial 10%)	10.00%	£677,223
Methodology base (12.75%)	12.75%	£531,155
Conservative (tertiary office 15%)	15.00%	£451,482
Distressed (17%)	17.00%	£398,366

Yield sensitivity: a 200 bps yield move shifts capital value by £170,841. The asking price implies a yield of 33.0%, which is well above any defensible market yield for the asset class.

Valuation stack

Basis	Calculation	Value
Rack Rent (ceiling)	£67,722 / 12.75% ARY	£531,155
VP (MV3)	Rack less 12mo void, 6mo rent-free, 10% reletting, holding costs, PV to today @ 8%	£390,000
MV1 (stabilised)	NOI / ARY (single-let)	£531,155
180-day restricted marketing	MV1 × 0.90	£478,040
90-day restricted marketing	MV1 × 0.80	£424,924
Asking	Auction guide	£205,000

Acquisition benchmark

Inverness City Centre conventional lease rate (acquisition-benchmarks.md): ~£10/sqft, yield 9-11%, indicative CV £91-111/sqft. The asking price of £28.66/sqft sits at 26-31% of the indicative range, well below benchmark. This is consistent with the methodology range above the asking; the benchmark cross-check supports the headline finding rather than contradicting it.

Note: 13 Harbour Road is on the trade park, not in the city centre. The acquisition benchmark is a rough sense-check; the Edozo office rate above is the load-bearing rent comparable.

Purchase costs

Item	Asking (£205,000)	Range upper (£365,000)
LBTT (Scotland non-residential)	£550	£6,750
Legal fees	£4,500	£4,500
Disbursements	£650	£650
Broker fee (1% price)	£2,050	£3,650
Lender arrangement (2% of 65% loan)	£5,070	£5,070
Lender legal	£2,500	£2,500
Survey	£2,000	£2,000
Total purchase costs	£17,320	£25,120
Refurb to let (Light £25/sqft)	£178,800	£178,800

Range solve uses the methodology 7% all-in purchaser cost markup. The itemised stack above is for audit; the range itself is computed against ×1.07.

Strategy & Appraisal

Value-add angles, holding-structure recommendation, and supporting analyses for the bid thesis.

Value-add angles

1. Single-tenant relet (income hold)

Default lens. 7,152 sqft re-let at Edozo Inverness 4,000+ sqft median, condition-adjusted to £9.47/sqft. Stabilised NOI £67,722. Max purchase at 15% c-on-c £365,000. Key risk: lease-up speed; methodology assumes 12 month void plus 6 month rent-free.

Strong — asking sits materially below the methodology range, before any value-add.

2. Multi-let managed-workspace conversion (operational reposition)

Office+Health flex at £19.20/sqft (Inverness City Centre × 0.80 off-spine factor), stabilised at 70% occupancy and 30% opex. NOI £67,286. MV2 £472,183. Cellular subdivision capex £393,360 eats the upside. Range £90,000 to £160,000 sits below asking.

Weak at asking — operator case does not justify £205,000 once cellular refurb is funded. See multilet.html.

3. SSAS-eligible commercial hold

Highland commercial unit, mixed retail/office trade-park — eligible for SSAS or SIPP holding. At 50% LTV variant, range tightens to £260,000 to £340,000. Loan £195,000 smaller; equity requirement higher, but rental income and capital gain tax-free within the wrapper.

Moderate — viable if buyer has a SSAS structure with available cash. Loan size sits at the small-ticket boundary.

4. Auction-guide arbitrage

The £205,000 guide is materially below the single-let methodology lower bound of £290,000. If the auction pack discloses no surprises (clean tenure, no planning notices, EPC band C or above, RV in line with sqft), bidding to the methodology lower at £290,000 preserves the 20% cash-on-cash hurdle.

Strong, conditional on DD — auction-pack review and a measured survey are essential.

Holding structure

Mixed retail/office trade-park unit on heritable (presumed) tenure is SSAS-eligible commercial. For a higher-rate-taxpayer buyer with available pension capital, a SSAS purchase at 50% LTV preserves the income within a tax-free wrapper. For a buyer without a SSAS structure, a limited-company SPV is the standard route given the lot size and the operational reposition optionality. Personal ownership is sub-optimal due to the income-tax exposure.

Sources

Rightmove listing: https://www.rightmove.co.uk/properties/87903585
Inverness office rent comparables: Edozo 2020-2026 lease database
Inverness multi-let flex rates: PropLens internal scoring data (multi-let.md, Inverness City Centre row, HIGH confidence)
Yield comparables: Inshes Retail Park, Inverness (£28.15m at 7.53%, recent transaction)
Highlands Industrial Secondary yields: PropLens yield-selection-guide.md
Inverness regeneration: Green Freeport (gov.scot), Castle Experience (invernesscastle.scot), A9 dualling (transport.gov.scot)
Activity map: Google Places API, 500m radius, 33 nearby businesses

Jurisdiction

Scotland