Given the following current income and expenses estimates for an apartment property:

Kshs. Kshs.

Rented Income(last year) 60,000

Less Expenses

Power 2,200

Heat 1,700

Janitor 4,600

Water 3,700

Maintenance 4,800

Reserve for replacements 2,800

Management 3,000

Depreciation 5,000

Mortgage Payments 6,300 34,100

Net Income 25,900

The building consists of 10 units that could rent for Kshs. 550 per month each. Estimated recovery and collection losses is at 5% of gross income.

Required :

Calculate the property indicative value if the capitalization rate is 11%. (25mrks)