The owners of a showpiece DUP advice centre are making an “exceptional” return on their investment, a valuation expert has told the Belfast Telegraph.

The comment from within the property world relates to the Ballymena constituency office jointly operated by Ian Paisley and Ian Paisley Jnr.

According to official Assembly figures, it is costing taxpayers £57,200 a year in rental payments to its owner, a DUP-linked company called Sarcon 250.

The two-storey property at 9-11 Church Street, Ballymena, was purchased in July last year by Sarcon 250 for £500,000.

Mr Paisley Jnr has vigorously defended the rental level as “bang on target” for similar-sized properties on the street.

He has also reiterated that the arrangement with Sarcon 250 was put in place after “independent expert advice” was considered.

The Church Street building had previously housed a discount store and its ground floor has been converted into office use.

A number of property sector sources spoken to by this newspaper remarked on £57,200 being a substantial annual return on an outlay of £500,000.

Even allowing for reasonably generous fit-out costs of £75,000, on top of the purchase price, the yearly yield would still be close to 10%.

The £57,200 figure is also more than three times higher than the next largest MLA office rental claim.

However, Mr Paisley Jnr has criticised the lumping together of his total with his father’s.

“Individually, they pay a rental charge to one company,” a statement issued this week by the MLA said.

“There are shared facilities |such as reception, waiting area and parking and conference facilities, but they have separate office facilities.

“Indeed, it would not take a mathematical genius to establish that they rent approx 1500 sq ft each for approx £26K, which is bang on target for most of the other similar-sized rental spaces on the same street, let alone the country.”

One source in the commercial property sector spoken to by the Belfast Telegraph gave an assessment — while stressing that an inspection of the premises would be required for a full valuation.

He said: “In broadly general terms, a town centre commercial property investment at £500,000, on the basis of rental income of £57,000, would be an exceptional return on the investment at that time.

“This would represent a return of 10.8% (net of costs), whereas the market evidence for a strong provincial town such as Ballymena in mid-2007 would have shown returns in the region of 5% to 7%.

“There are two possible reasons as to why a price of £500,000 would have been accepted for the investment.

“Assuming that the rent receivable is a fair, open market rent, then the first option is that the vendor has simply sold the property much too cheaply.

“Taking an average yield of say 6% against the rental income of £57,000 per annum, a professionally-advised vendor should have expected to achieve a price of around £900,000.

“Alternatively, if the purchase price was at market value, and assuming the same yield at 6%, then the purchaser should have anticipated a rental income of £32,000, rather than the £57,000 actually being paid.

“This is a general view only. A more accurate assessment of the capital and rental values of any property can only be established after an internal survey and measurement is undertaken, and the lease documentation inspected.”

The rates charged for commercial properties in Northern Ireland are calculated on the basis of their annual rental value in 2001, as fixed by the government’s Land and Property Services agency.

The 2001 figure for the Paisleys’ office — its NAV (Net Annual Value) — is £17,200.

Clearly, the rental values of properties across Northern Ireland will have climbed significantly since 2001.

The £57,200 being paid for 9-11 Church Street is around 3.3 times its 2001 NAV figure.

Nearby properties currently on the market have not risen by anything like that level.

A number of retail Church Street premises are currently available for rent or purchase, with advertised rental figures of between 1.21 times and 2.27 times their NAV figures.

It is accepted that valuation is not necessarily an exact science, and that assessments can be affected by various factors, including the terms and length of rental agreements, the dimensions of the property, and the quality of the premises.

It is generally agreed that 9-11 Church Street is on the less busy, lower value end of the street.

The Belfast Telegraph has been campaigning for independent rental valuations where MLAs are claiming for offices owned by their parties or family members.

Sarcon 250 was headed for a period by Mr Paisley Jnr’s father-in-law, James Currie.

He was replaced as the firm’s sole director in August by veteran DUP councillor Sam Hanna.

North Antrim businessman Seymour Sweeney was the director for five months prior to Mr Currie.

Mr Paisley Jnr has stressed that the rental expenses are going directly to the bank to pay off the mortgage. His statement this week said: “The company will continue to exist even if its directors change, as its purpose is to provide an advice centre facility for the DUP in North Antrim.”

He has also stated that the market today is “considerably different” from 2007.

According to official Land and Property Services agency figures — released under freedom of information — 9-11 Church Street has floor space totalling 3056 square feet.

A recently-published official report on Assembly pay and expenses recommended a review on the size of constituency offices.

The study by the Senior Salaries Review Body pointed out that it has recommended a cap of 800 square feet for MPs’ offices.

It also indicated that a limit for MLA premises could be smaller, as they employ fewer people.

The Paisleys’ Ballymena centre would fall foul of an 800 square feet limit – even if they were permitted full offices each and a third office in light of Dr Paisley’s MP role.