Q3- A freehold retail center is having just been completed in January 2017. In order to attract tenants to the shop, the owners decided to introduce the center to market with a rent 25% below the current market rent. Currently, with all the 14 shops, the center produces a total monthly income of R 1,500,000.00. There are 2 more years left on the lease of the all the current tenants. With the reversion to full market rent in view, and factoring in all outgoings of 35% into the rental income, calculate the capital value of the center with a 10% interest rate if the center were to be sold today. Hint: . ERV = 25% on top of current rent. . Capitalise the net rental income . Assume a rate of 8% for the term period