Cape Value (Pty) Ltd Property Valuers is a professional services firm offering specialised valuation and appraisal services of property, plant, machinery, equipment and rights in property.

Clients include individuals, SMME’s, multinational enterprises (MNE’s), government and parastatals. The head office is situated in Bellville (Cape Town) while we operate as a Level 4 BBBEE contributor throughout South Africa & Africa, travelling as required by our clients. The fundamental differentiation of Cape Value’s services is based on enabled people, speed and quality, and a continual quest to learn and improve.

The Cape Value valuers are registered with the South African Council for the Property Valuers Profession (SACPVP) and the South African Institute of Valuers (SAIV). Reports are fully motivated and in compliance with the South African Institute of Valuers (SAIV), the Standards and Generally Accepted Valuation Principles (GAVP) of the International Valuations Standards Committee (IVSC), and International Financial Reporting Standards (IFRS).

Cape Value utilises internationally recognised software and believes that true asset value can only be determined by taking a historic, current and future view. We offer more than 40 years of experience and Professional Indemnity (PI) for your peace of mind.

The company is registered with the following professional bodies/institutes:

• SAIV (South African Institute of Valuers);
• SACPVP (South African Council for the Property Valuers Profession).

What would I use a new replacement cost valuation for?
A new replacement cost valuation is often required for insurance purposes.

New Replacement Cost Example:
Replacing a previous era industrial building consisting of asbestos roof sheeting and timber trusses with a modern day steel frame and roof sheeting.

Reproduction Cost Example:
Replacing an historical religious building with the exact replica of original masonry work and building materials.

Valuation methodology applicable for this value definition:

• The cost method also known as Estimated New Replacement Cost (ENRC);
• The estimated new replacement cost (ENRC) approach is used to produce the total sum insured. The model accommodates a dynamic view of the construction process and associated pre-construction, during construction and post-construction (policy period) escalation rates.

Why are our valuations different from others? Why our valuations are of a high standard:

Cape Value has developed an insurance model that addresses three unique aspects required for any property.

The first aspect is the dynamic view taken on the construction process making allowance for fees (preliminaries, contingency, demolition, professional fees, sundry fees) and escalation rates (pre-construction, construction, post-construction). The systemic flow of the process is imperative for accurate application of the various rates and fees.

The second aspect is the recognition of area specific replacement rates. Areas differ in building replacement levels and should be treated in nodes of homogenous buildings. For example, market characteristics influencing replacement rates of a property in the CBD is potentially different to that of a property located at sea-front, on a minor road or in a rural area. Therefore, generic replacement rates do not adequately treat the area specific dynamics. The more accurate and suitable approach is area specific replacement rates.

The third aspect is property specific building escalation rates. Properties differ in terms of the finishes and building technology employed at the time of construction. For example, an escalation rate for an office block of conventional finishes will be different to a green building. Therefore, generic group escalation rates do not adequately treat the property specific configuration of finishes. The more accurate and suitable approach is profiled escalation rates.

Secondary data from trusted third parties and internal research are applied to proprietary models and knowledge management processes.

Our reports are aligned with International Valuation Standards (IVS) & International Financial Reporting Standards (IFRS). It is very important to note that our reports comply with the specific provisions of varying degrees of optimization as set out in IAS 16 when conducting replacement valuations.

What would I use a market valuation for?
A market valuation can be required in various instances such as when deciding to buy or sell, rounding up an estate late, managing a portfolio of investments, reporting for financial statements or legal purposes such as disputes or divorces.

What would I use a market rent study for?
A market rent study can be required in various instances, such as when deciding to renew an existing lease agreement, signing a new agreement, before investing in a property it will be prudent to compare the lease levels with current market rent so as to assess the sustainability of income and market related escalation rates. Included in this study could be a market vacancy assessment aimed at identifying patterns of movement (influx/efflux), absorption levels and overall profile of tenants.

Valuation methodology applicable for this value definition:

• Sales Comparison;
• Income Capitalisation;
• Cost (Depreciated);
• Residual;
• Profits.

Why are our valuations different from others? Why our valuations are of a high standard:

We can value a single property (single title deed) or more than one managed collectively as a notarially tied operation (valuation condition). For example, an investor can operate a selection of farm portions as a unit, although the various farm portions are on different legal title deeds.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used on own risk. Each project is tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.

What would I use a fair value valuation for?
Fair value can be considered when there are disputes on value based on current and future use. In some cases the property’s value is not based only on its current use, but also the probable future use as perceived by the market.

For example, you might own a vacant tract of land located in a developed or developing area. The fair value of this stand is not only based on its current use i.e. vacant, but to what use it can feasibly be employed in the future. If the property is uniquely located for a mixed used development, block of flats, filling station, or a specialised plant with access to suppliers, then the fair value is a percentage of this future use.

Valuation methodology applicable for this value definition:

• Sales Comparison;
• Income Capitalisation;
• Cost (Depreciated);
• Residual;
• Profits.

Why are our valuations different from others? Why our valuations are of a high standard?

It is possible to take two value perspectives on a property.

The first perspective of value is that of current utility. This perspective holds that the value of the property is a function of its current use.

The second perspective of value is that of future utility. This perspective holds that the value of the property is a function of future possible use and should be valued as such.

In between these two values lies the fair value for both parties to the transaction. Fair value is therefore a definition associated with fairness to both the current and future owner given the utility offered by the property.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used at own risk with each exercise tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.

What would I use this valuation for?
This approach is normally associated with a development. When, as an owner, you are contemplating selling a property to a developer or when a developer is anticipating to buy a property, the value basis would most often be that of residual value.

Valuation methodology applicable for this value definition:

• Sales Comparison;
• Income Capitalisation;
• Residual.

Why are our valuations different from others? Why our valuations are of a high standard:

Highest and Best Use (HABU) can be described as the most probable use of a property which is physically possible, legally permissible, financially feasible, and appropriately justified which results in the highest value of the property being valued.

A highest and best use analysis can be applied to both vacant and improved properties. Where the property has existing buildings, allowance will need to be made for demolishing and redeveloping, continuing with the existing use or modifying the existing use.

Any property will first be evaluated on its physical possibilities and limitations such as size, shape, terrain, accessibility, risk of natural disasters, frontage, depth, topography and privacy to name a few. It then will be considered on any or all legal permissibility such as private restrictions, deed restrictions, long-term leases, zoning, environmental regulations, historic/heritage limitations and the probability of having these amended/removed.

Only once these two criteria’s are adequately met, can the financial feasibility and justification be considered. The highest and best use is the use that delivers the highest value consistent with market risk and return requirements.

Any HABU discussion should include a spectrum of uses, timing for these uses in terms of absorption, rents, occupancy and the most probable market participants or users.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used at own risk with each exercise tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.

What would I use this valuation for?
Combining two tracts of land or operating a building in association with another will, to reflect the true value, require a synergistic approach as the value is embedded in the conjunctive use.

Synergistic Value Example:
The value of a residential property improved with a home, though offering limited yard space, would probably be higher when an adjacent vacant stand forms part of the liveable yard space. Therefore, the value of the property will be higher in synergy than not.

The same is true for other types of properties. The value of an industrial property with limited yard space to park or turnaround large vehicles will be less than with an adjacent stand allowing this functionality.

Another example is using two industrial properties adjacent to one another with the manufacturing processes flowing from the one building to the other.

Valuation methodology applicable for this value definition:

• Sales Comparison;
• Income Capitalisation.

Why are our valuations different from others? Why our valuations are of a high standard:

A synergistic approach to determining the value of a property should account for the increase in utility, functionality or potential scarcity as the property offers a higher use, is more functional and probably scarcer as there could be few properties available in the market offering similar combined characteristics.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used ot own risk with each exercise tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.
Only once these two criteria’s are adequately met, can the financial feasibility and justification be considered. The highest and best use is the use that delivers the highest value consistent with market risk and return requirements.

Any HABU discussion should include a spectrum of uses, timing for these uses in terms of absorption, rents, occupancy and the most probable market participants or users.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used at own risk with each exercise tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.

What would I use this valuation for?
The liquidation value of a property or asset is important for risk management purposes. Similar terms include forced sale or fire sale value. Owners, investors or financial institutions take the liquidation value as a measure of minimum value and therefore an indication of exposure.

Valuation methodology applicable for this value definition:

• Sales Comparison;
• Income Capitalisation.

Why are our valuations different from others? Why our valuations are of a high standard:

By assuming different conditions of sale, it is possible to deliver different liquidation values. Real estate are normally valued as a whole (entire building), but this can be done under orderly conditions or forced sale conditions. In the case of orderly conditions, the value attainable for the property will be higher and is dependent on the current owner being able to hold ownership for a normal market disposal period. Forced sale conditions require immediate sale and will deliver lower values.

Alternatively, when decommission a plant the various machinery can be valued piecemeal (piece by piece) under orderly or forced sale conditions. The plant and machinery could also be valued as a whole under orderly sale conditions.

Our primary research consists of collected deeds office data and physical inspection data. It is important to note that we inspect the subject property (the property being valued) and surrounding properties used as comparison. We do not conduct desktop or automated valuations as it is a legal requirement to identify a property through physical inspection. However, as technology improves and more accurate options become available, valuation processes can be reviewed and refined.

We subscribe to 3rd party data suppliers using their data as a first layer for cost effectiveness, to which we add our internal data, research and analysis. We do not disclaim any of our research to be used at own risk with each exercise tailored for the specific instruction at hand as at the time of valuation and under the conditions and assumptions stated in the report.

Cape Value has developed various valuation models that are aligned with International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), but these models also accommodate our proprietary views specifically on market dynamics and risk on which we have done original research.