Telecoms mast valuations, backed by market evidence
We are increasingly asked to provide telecoms valuation advice, driven by legislation changes affecting rents and a growing number of investors interested in telecoms infrastructure. We advise landowners on both the rental and capital value of agreements granted to operators.
Capital value is based on the return an asset provides over its lifetime, taking into account the tenant’s covenant strength and income risk. It reflects net return and potential future changes, such as a rent review or renewal. Since capital values are closely tied to rents, the new Code’s impact on rent also affects the capital value of your asset.
Before the new Code, rents for greenfield sites typically ranged from £5,000pa to £7,000pa or more where a site was shared by other operators. Rooftop sites averaged around £12,000pa in provincial towns, and well over £20,000pa in major cities.
Since the new Code introduced the “No Scheme” assumption in assessing rents, values have fallen significantly. The Upper Tribunal has awarded greenfield site rents between £1,750pa plus inflation and £3,500pa, with a higher rate of £5,750pa in the Hanover case. Rooftop site rents range from £3,300pa, for a water tower with shared costs, to £5,000pa for a block of flats, both now eligible for indexation increases. Courts do acknowledge that operators realistically make additional commercial payments to secure a consensual agreement and avoid the cost and delay of litigation.
KEY CONTACTS
Robert Hepworth
MRICS
A database of over 12,000 transactions
We use this evidence base to justify rents and valuations with real market comparables, not estimates. It’s particularly valuable for the rent reviews and lease renewals we handle, and with more investors now paying lease premiums for telecoms sites, understanding this fast-moving market properly has never mattered more.
Common questions about telecoms valuation
Capital value reflects the return the asset provides over its lifetime, taking into account the tenant’s covenant strength and income risk. It also allows for potential future changes, such as a rent review or renewal, since these affect what the income stream is genuinely worth.
The new Code introduced a “No Scheme” assumption when assessing rents, which values the land without accounting for its telecoms use. This has pushed rents down significantly compared to pre-Code levels, and since capital value is closely tied to rent, it’s affected asset values too.
Sometimes, yes. Courts acknowledge that operators realistically make additional commercial payments to secure a consensual agreement and avoid the cost and delay of litigation, so the Tribunal figure isn’t always the final word on what’s achievable.
We draw on a database of over 12,000 transactions to provide comparable evidence that justifies rents and valuations, particularly useful for the rent reviews and lease renewals we handle regularly.
It depends on the site and the terms on offer. With a growing number of investors paying lease premiums for telecoms sites, it’s a genuinely fast-moving market, understanding current demand properly before agreeing a sale matters more than it used to.
Please contact a member of our Telecoms Team to discuss how we can help you
Offices in Battle, Haywards Heath, Pulborough, Surrey Hills and Tunbridge Wells.
Telecoms Insight & Opinions
-
Telecoms Rooftop Training
On the 28th July 2022, the Batcheller Monkhouse Telecoms department attained their Rooftop Training certification…
-
Farmers and Landowners Agree to Electronic Communications Operators
Many farmers and landowners agree to electronic communications operators, such as mobile phone companies, installing…
