Property Valuation: In an Economic Context

Property Valuation: In an Economic Context

Language: English

Pages: 424

ISBN: 1405130458

Format: PDF / Kindle (mobi) / ePub

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: www.blackwellpublishing.com/wyatt

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where a capital sum is received early and the ben- efit to the tenant will be an immediate profit rent. A premium may also be paid by the assignee when a lease is assigned and there is a profit rent available because the contract rent is below the market rent. When there is great demand for a property, such as prime retail, tenants may pay key money to secure the property – effectively a premium in addition to rent. This key money should be treated as the capital value of additional rent

al. (2000) suggest that the methods employed to estimate the value of the property that is compulsorily acquired are no different from Chapter 4 those that adopted in other market valuations, just subject to the above rules. In most cases, the valuation is likely to be on an existing use basis using the comparison or investment method. Care must be exercised when selecting comparable evidence because transactions would have taken place in the ‘scheme’ world. If the valuer feels that

(equity) may be apportioned at the same ratio as that Wyattp-07.indd 389 8/8/2007 2:04:39 PM 390 Property Valuation calculated on completion, that is, £55 500/600 000 = 9.25% to landowner and 91.75% to the developer. Alternatively, the equity can be geared (recal- culated at each review). The former is known as a proportional arrangement Chapter 7 where future growth is apportioned proportionately at each review. The lat- ter is known as an equity arrangement, for example assume a

Digest 2005). range of office accommodation let on different lease terms. From an investor’s perspective there are two main methods of leasing offices: the whole building may be let to a single tenant and this is usually regarded as the best option, alternatively the building can be split into suites that are let to separate ten- ants and the cost of maintenance of the building as a whole is recovered via a service charge to each tenant in addition to their rent. Historically, industrial

restrictions), consumer behaviour (spend- ing habits, changes in tastes or fashion) and population density. Whatever the property type, the valuer tries to ascertain market strengths and weak- nesses, assess the likely supply of and demand for properties, comparable to the one being valued and determine the factors likely to impact on the value of properties in the market. Important local market characteristics include stock availability, rental growth rates, yields, rents, capital values,

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