Property Valuation: In an Economic Context

Property Valuation: In an Economic Context

Language: English

Pages: 424

ISBN: 1405130458

Format: PDF / Kindle (mobi) / ePub

This book provides a single text for postgraduate study of valuation on real estate courses. After a general introduction to the property market and the economic ideas that underlie valuation, it introduces the theory of valuation as a set of analysis techniques for identifying and understanding market signals in a financial context. The final section of the book, describes the three categories of market players who rely on valuation advice - the developer, investor and occupier. *'all in one' text for postgraduate study of valuation on real estate courses sets valuation in its business finance context User-friendly and accessible format using tried and tested teaching and learning devices Balanced treatment of theory and practice - with extensive use of examples Accompanying website with applications:











disturbance compensation liability if lease is longer than 5 years. Baum (2003) notes that contracting out occurs only occasionally but is more prevalent in the case of secondary and tertiary properties and may be increasing as landlords try to avoid renewals of short leases. Baum also found that, at lease renewal, tenants who secure a short lease do not pay a rent premium nor is a rent premium paid if a break clause is inserted. But, as with rent reviews, there is precedent suggesting

additional development is granted after acquisition of land but within 10 years of the acquisition completion date, the amount being the difference between the compensation paid and the amount which would have been paid assuming the permission was in force at the time (Denyer-Green, 2003). Marriage value can also be taken into account when estimating market value. For example, if the area that connects the road to the development land in Figure 4.5 is being compulsorily acquired in order

lower yields than those valued at higher yields. For example, take two investment opportu- nities; a factory in the north of England and a shop in the West End of London, both valued at £500 000 and both requiring the same expenditure on remediation: Factory Shop Unimpaired valuation Income (£) 500 000 250 000 YP perpetuity @ 10% 10 20 (factory)/5% (shop) Valuation (£) 5 000 000 5 000 000 Impaired valuation Income (£) 500 000 250 000 YP perpetuity @ 11% 9.0909 16.6667

of many property holdings means that this situation is changing. 4. Estimate the going concern value of the business. There is an established methodology for estimating the going concern value of a business. See, for example, the International Valuation Standards published by the IVSC (2005) and the RICS Red Book (RICS, 2003). Wyattp-07.indd 381 8/8/2007 2:04:37 PM 382 Property Valuation 5. Appraise the worth of property assets to the business. A cash-flow approach could incorporate

connection with many activities, chiefly develop- ment appraisal, transfer of ownership, monitoring of property investment performance, reporting the value of property assets held by companies, loan security, tax matters and insurance risk assessment. The diversity of property makes valuation a difficult task, no two properties are ever the same, yet valuation relies on the comparison of properties to give an indication of value. To do this the valuer must be aware of, and be able to

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