Telecoms

Telecommunications is often seen as an add-on to the core business of a commercial portfolio. However, like any other property it has to be effectively managed to obtain the best returns and values. Telecommunication installations are more commonly known as 'mast and aerial sites' and usually consist of leases and licences to occupy and install equipment on land and buildings.

Telecoms companies have a vast requirement for real estate, including base stations, switches or data centres (usually light industrial units with a sui generis use), shops, concessions, offices, warehouses and call centres. Telecoms valuation considers the valuation of base stations and the characteristics of the mobile operator as a tenant. Tenants hold the greatest market share under the telecoms umbrella, and ultimately dictate the current trends. The traditional roles of landlord and tenant are often reversed, with the tenant being the stronger party.

The practice of valuing installations is often kept private, sometimes to the detriment of good market valuation practice. It can be difficult to obtain comparable evidence when sites are not widely bought, sold or sublet. It is a specialist market and surveyors work hard to build up their databases of comparable information.

While it is uncommon for an operator to buy a freehold, sites are sold by private treaty or at auction to private investors or infrastructure companies. They are often included as part of a multi-use property or ancillary to an industrial unit or agricultural land parcel. In these instances it is difficult to separate out the value of the 'mast site' element of the transaction. A good source of comparable information from auction sales can be found at the Essential Information Group's website.

This section is maintained by Philip Morris MRICS ACIArb of 4M Properties Group.

Checklist: Telecoms valuation checklist

RICS journal article: Simpler ECC valuation is finding favour

Feature: Telecoms: legal implications of the Electronic Communications Code