A retail unit is currently let on FR&I terms at a fixed rental of 23,000 per annum with 15 years unexpired. The property was recently sub-let at its Market Rent of 54,000 for the residue of the term on FR&l terms with rent reviews to Market Rent every 5 years. Comparable freeholds achieve yields of 8% with equated yields of 13%. Leaseholds justify an added 5% in terms of equated yield. a) Value the head-leasehold interest using the traditional dual rate method. b) c) Calculate the implied growth rate. Value the head-leasehold interest using the contemporary DCF approach. d) Calculate the growth in profit rent over 10 years and compare this with the growth in Market Rent over the same period. e) Discuss the reasons for the difference between the value in part a. above and the value in part c) above. A retail unit is currently let on FR&I terms at a fixed rental of 23,000 per annum with 15 years unexpired. The property was recently sub-let at its Market Rent of 54,000 for the residue of the term on FR&l terms with rent reviews to Market Rent every 5 years. Comparable freeholds achieve yields of 8% with equated yields of 13%. Leaseholds justify an added 5% in terms of equated yield. a) Value the head-leasehold interest using the traditional dual rate method. b) c) Calculate the implied growth rate. Value the head-leasehold interest using the contemporary DCF approach. d) Calculate the growth in profit rent over 10 years and compare this with the growth in Market Rent over the same period. e) Discuss the reasons for the difference between the value in part a. above and the value in part c) above