Agricultural Business

With the valuation of agricultural farm land, the value attributes on the farm is identified and then categorised and apportioned as to determine the monetary contribution towards the entire entity in order to derive at the market value. Read more

Plant and Machinery Valuations

More notes on Plant and Machinery Valuations;

Machinery are often leased for the following reasons:

A lease is “the right to use” an asset rented for a period for predetermined production etc.

Specialised maintenance is more economical as per lease contract!

A lease offers a more predictable lifespan of a machine and further the renewal options and at the end of lease the options are to a greater extent.  Read more

Redevelopment of Property

Redevelopment of Property:  One property or an entire suburb!

  • Timing
  • The rate of development

redevelopement-graph

Urban Land Economics 2004; Jack Harvey and Ernie Jowsey

As can be seen from the above graph is that with the acquisition, the use of the building for income generation takes priority. The land presents a secondary value apportionment. Let us assume that the economical lifespan of the building is 25 years, which is presented by the figure Z.

Read more

In search of the correct applied valuation methodology

In my valuation career, now more than 30 years, there has been an increasing shift from linear valuation methodologies to more judgement-based approaches. Although some of the fundamentals still hold true, it is possible to modify existing linear methods to account for non-linearity by incorporating professional judgement of the valuer. Read more

Movable and Immovable Assets

This article provides a brief account of some definitions and terminology used in the property industry. The aim is to highlight the distinction between the terms movable and immovable assets (also referred to as property).

Read more

Factors Influencing Investment in Immovable Property

As you probably know, modern day real estate economies are cyclical and goes through cycles of suppressed market conditions, where property prices are relatively low, to expansionary conditions of unsustainable high levels. Holding an investment through an economic cycle and buying or selling at the appropriate time is the aim of most investors. However, apart from the general real estate economic cycles, there is also the property investment cycle or building life cycle. The two are not exactly the same but they are very close.

Read more

The intricacies of valuing a retirement village

The writer is fortunate to have access to accumulated information, having been in the industry for more than 30 years, and working with various stakeholders such as bankers, buyers, sellers, investors, brokers, researchers and many others. Given this accessibility to relevant and practical information, sensitised for confidentiality, some general guidelines and notes can be shared as to the valuation approach and methodology to be used in valuing the frail care, food and catering, and assisted living units within a retirement village. Read more

What determines the value of land

“How does the pattern of land use determine the types of property to be found in an area and their values”?

Land in a sense has no value of itself, but for the right to which the land can be put. Improving the use rights in land will generally lead to an increase in value. Land can be zoned for residential-, commercial-, industrial, agricultural and several other uses. Normally, the extent or magnitude to which a property will be developed is dictated by the demand for such a utility. This is also known as the highest and best use of a particular approved right in the land. Read more

Factors to consider when choosing a valuation method

 

Introduction

Valuation of real estate refers to the estimation of the most likely selling price (market price) or the worth of the property to an individual or group of individuals i.e. investment value (Baum and Crosby, 2008). There are many valuation methods. Methods such as the sales comparison, single capitalisation as well as the term and reversion are considered traditional approaches while others such as the discounted cash flow (DCF) and arbitrage valuation models are considered contemporary valuation approaches. Traditional valuation approaches are backward-looking, based upon the principle that a property’s value depends upon its economic and physical characteristics. On the other hand, Read more

Concepts and Principles

The definitions from the International Valuation Standards, eighth edition (2007) are reproduced with the permission of the International Valuation Standards Council who owns the copyright. No responsibility is accepted by the IVSC for the accuracy of information contained in the text as republished, the English version of the IVSC Standards as published by the IVSC from time to time being the only official version of the IVSC Standards.
Read more