Property Valuation (eBook)

Peter Wyatt is a Chartered Valuation Surveyor who has conducted extensive teaching, consultancy and research in land management and valuation. Currently Director of Undergraduate Programmes for Real Estate & Planning at the University of Reading, he has developed and delivered national and international university programmes at all levels, has published widely in leading real estate journals and has published two text books. Dr Wyatt has been involved with and lead national, European and international real estate research projects. Recent projects have investigated the way in which key attributes of the domestic and non-domestic building stock affect value; in particular energy consumption, environmental labelling and public transport accessibility. Ongoing work with UK Government is investigating the theory and practice of development viability appraisal in planning policy, focusing on the issue of development value and planning gain.

Preface

Acknowledgments

PART A: PROPERTY VALUE AND PROPERTY VALUATION

1. Microeconomic Concepts

1.1 Supply and demand, markets and equilibrium price determination

1.2 The property market and price determination

1.3 Location and land use

1.4 The economics of property development

Key points

2. Macroeconomic Considerations

2.1 The commercial property market

2.2 Property occupation

2.3 Property investment

2.4 Property development

2.5 Property and the wider economy

Key Points

3. What is Property Valuation

3.1 Introduction

3.2 The need for valuations

3.3 Determinants of Value

3.4 Valuation Procedures

3.5 Measurement

Key Points

Appendix - Inspection Checklist

4. Valuation Mathematics

4.1 Introduction

4.2 The time value of money

4.3 Yields and rates of return

Key Points

PART B: VALUATION METHODS

5. Comparison Method

5.1 Introduction

5.2 Sources of data

5.3 Comparison metrics

5.4 Comparison adjustment

Key Points

6. Investment Method

6.1 Introduction

6.2 All-risks yield (ARY) methods

6.3 Discounted cash-flow (DCF) methods

Key Points

7. Profits Method

7.1 Introduction

7.2 Method

7.3 Example of a profits method valuation

7.4 Summary

Key Points

8. Replacement Cost Method

8.1 Introduction

8.2 Method

8.3 Application

Key Points

9. Residual Method

9.1 Introduction

9.2 Conventional residual land valuation

9.3 Problems with the residual method

9.4 Cash-flow residual model

Key Points

10. Automated Valuation Models and Computer-Assisted Mass Appraisal

10.1 Introduction

10.2 Method

10.3 Example

10.4 Multiple regression analysis: research and applications

PART C: VALUATION APPLICATIONS

11. Lease Pricing

11.1 Introduction

11.2 Lease incentives

11.3 Alternative lease arrangements

11.4 Valuations at rent review, lease renewal and lease end

Key Points

12. Valuations for financial statements and for secured lending purposes

12.1 Valuing property for financial statements

12.2 Methods of valuing property assets for financial reporting purposes

12.3 Valuations for lending purposes where the loan is secured against commercial property 247

Key Points

13. Valuations for taxation purposes

13.1 Capital Gains Tax and Corporation Tax

13.2 Inheritance Tax

13.3 Business Rates

Key Points

14. Valuations for Compulsory Purchase and Compensation

14.1 Compensation for land taken (compulsorily acquired)

14.2 Compensation for severance and injurious affection

14.3 Disturbance compensation

14.4 Planning compensation

14.5 A note on CGT and compensation for compulsory acquisition

Key Points

15. Specialist Valuations

15.1 Operational entities or 'trade-related' properties

15.2 Valuation of contaminated land

15.3 Synergistic Value

15.4 Special Purpose Valuations

16. Investment Valuations - further considerations

16.1 Short leases and leases with break clauses

16.2 Over-rented property investments

16.3 Valuation accuracy, variance and uncertainty

Key Points

PART D: APPRAISAL

17. Investment Appraisal

17.1 Introduction

17.2 Appraisal Information and Assumptions

17.3 Appraisal methodology

17.4 Risk analysis in property investment appraisal

Key Points

18. Development Appraisal

18.1 Introduction

18.2 Conventional residual profit appraisal

18.3 Cash-flow profit appraisal

18.4 Development risk

18.5 Development Finance

Key Points

GLOSSARY

Index