This new edition of the ‘all in one' textbook for the postgraduate study of valuation on real estate courses retains its focus on the valuation and appraisal of commercial and industrial property across investment, development and occupier markets. It is structured from the client perspective and covers single-asset pricing, risk and return issues.
The structure of the book has been substantially revised. Part A introduces the key microeconomic principles, focussing on land as a resource, production functions, supply and demand and price determination. The locational aspect of real estate is also introduced. Macroeconomic considerations are categorised by the main market sectors (and their function); the market for land (development), for space (occupation) and for money (investment). The economic context is set and the author then explains why property valuations are required and discusses the main determinants of value and how they might be identified. The mathematics required to financially quantify value determinants are also introduced. Part B of the book describes the methods of valuation; Part C applies these methods to the valuation of a range of property types for a wide variety of purposes; and Part D covers investment and development appraisal.
The author introduces valuation activities from a broad economic perspective, setting valuation in its business finance context and combining its academic and practical roots. Changes in this second edition include:
- less daunting economics.
- expanded companion website with PowerPoint slides for lecturers, self-test questions for students, and valuation spreadsheets.
- up-to-date case studies and sample valuations.
- reference to the newly-published Red Book (the valuer's bible).
Property Valuation with its user-friendly format, using tried-and-tested teaching and learning devices and a clear writing style, remains the core text for students on real estate, estate management and land economy degree courses, as well as for fast-track conversion courses for non-cognate graduates.
Contents
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
- Notes
- References
- 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
- 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
- Appendix – Inspection checklist
- 4 Valuation Mathematics
- 4.1 Introduction
- 4.2 The time value of money
- 4.3 Yields and rates of return
PART B VALUATION METHODS
- 5 Comparison Method
- 5.1 Introduction
- 5.2 Sources of data
- 5.3 Comparison metrics
- 5.4 Comparison adjustment
- 6 Investment Method
- 6.1 Introduction
- 6.2 All-risks yield (ARY) methods
- 6.3 Discounted cash-flow (DCF) methods
- 7 Profits Method
- 7.1 Introduction
- 7.2 Method
- 7.3 Example of a profits method valuation
- 7.4 Summary
- 8 Replacement Cost Method
- 8.1 Introduction
- 8.2 Method
- 8.3 Application
- 8.4 Issues
- 8.5 Summary
- 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
- 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
- 10.5 Advantages and disadvantages of regression-based valuation
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
- 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
- 13 Valuations for Taxation Purposes
- 13.1 Capital gains tax and corporation tax
- 13.2 Inheritance tax
- 13.3 Business rates
- 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
- 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
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
- 17.5 Financing property investment
- 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
- Glossary
- Index
About the Authors
- Peter Wyatt senior lecturer at the School of the Built Environment, University of the West of England.
Book Details
- Paperback: 496 pages
- Publisher: Wiley-Blackwell; 2 edition (July 15, 2013)
- Language: English
- ISBN-10: 1119968658
- ISBN-13: 978-1119968658
- List Price: $85.00