John Wiley & Sons Property Valuation Cover The new edition of the popular 'all-in-one' textbook on the valuation and appraisal of property, off.. Product #: 978-1-119-76741-1 Regular price: $69.07 $69.07 Auf Lager

Property Valuation

Wyatt, Peter

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3. Auflage November 2022
Softcover
Lehrbuch

ISBN: 978-1-119-76741-1
John Wiley & Sons

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The new edition of the popular 'all-in-one' textbook on the valuation and appraisal of property, offering a more international perspective on valuation practice

Property Valuation provides a comprehensive examination of property valuation principles, methods, issues and applications of the valuation and appraisal of commercial and industrial property across investment, development and occupier markets. With a clear writing style, this easily accessible textbook presents valuation from the client perspective, offering balanced coverage of the theory and practice of single-asset pricing, risk and return issues.

The updated third edition reflects significant developments that have occurred in valuation over the past several years, particularly the expanding internationalisation of the valuation profession and the growing interest in valuation practice in emerging economies. Greater emphasis is placed on international content and context, such as the challenges of real estate asset valuation in countries with developing market economies, to offer a more global view of valuation practice. Throughout this edition, chapters link the most recent academic research to practical applications, incorporate the latest professional guidelines and standards and address land and property taxation, compulsory acquisition of land, the valuation of non-market goods and services and key valuation challenges with a more international perspective.
* Addresses the key challenges faced by valuation professionals in a single, up-to-date volume
* Combines academic coverage of principles with practical coverage of valuation applications
* Incorporates consideration of non-market value, including countries where land is seldom sold yet has social and environmental value
* Contains a wealth of well-developed worked examples and classroom-proven teaching and learning devices
* Includes access to a companion website with supporting material for students and lecturers

Property Valuation, Third Edition is an excellent textbook for advanced undergraduate and graduate courses including real estate finance, real estate economics, property surveying, valuation and land economics in the UK, Europe and North America. It is also a valuable resource for early-career practitioners preparing for professional competency assessments as well as those studying property valuation and appraisal in developing countries and emerging economies.

Preface xi

SECTION A VALUATION PRINCIPLES 1

1 Property Rights and Property Value 3

1.1 Property rights 3

1.1.1 Tenure 4

1.1.2 Property rights in England 6

1.2 Property value 8

1.2.1 Extent of property rights 9

1.2.2 Security of property rights 11

1.2.3 Physical and geographical characteristics 13

1.3 Property valuation 13

1.3.1 Market transactions 14

1.3.2 Investment decisions 15

1.3.3 Compensation 15

1.3.4 Land and property taxation 16

1.3.5 Accounting, lending and insurance 16

Note 18

References 18

2 The Economics of Property Value 19

2.1 Introduction 19

2.2 Land as a resource 19

2.3 Supply and demand, markets and equilibrium price determination 21

2.4 The property market and price determination 22

2.4.1 The property market 22

2.4.2 Price determination in the land market 23

2.4.3 Price determination in the property (land and buildings)

market 26

2.5 Location and land use 29

2.6 Economics of property development 36

2.6.1 Type and density of development 36

2.6.2 Timing of development 38

2.7 Non-market

concepts of value 40

Notes 42

References 42

3 Property Markets 45

3.1 Introduction 45

3.2 Property markets 46

3.2.1 Occupier market 47

3.2.2 Investment market 59

3.2.3 Development market 63

3.3 Property markets interaction 69

Note 72

References 72

4 Valuation Mathematics 75

4.1 Introduction 75

4.2 The time value of money 76

4.3 Single-sum

investments 77

4.4 Multi-period

investments 78

4.4.1 Level annuities 78

4.4.2 From a level annuity to a growth annuity 82

4.5 Timing of receipts 83

4.6 Yields 84

4.7 Rates of return 85

Notes 90

References 91

5 Valuation Process and Governance 101

5.1 Valuation process 101

5.1.1 Confirm instruction and agree terms of engagement 101

5.1.2 Inspect the property 103

5.1.3 Gather and analyse comparable evidence 104

5.1.4 Establish basis of value 106

5.1.5 Make assumptions and special assumptions as

appropriate 109

5.1.6 Select valuation approach(es) and method(s) and

undertake the valuation 110

5.1.7 Produce a valuation report 110

5.2 Valuation governance 112

5.2.1 Standards of conduct 113

5.2.2 Valuation process standards 115

5.2.3 International valuation standards 115

0005388997.INDD 6 06/03/2022 9:06:49

Contents vii

5.2.4 National valuation standards 116

5.3 Valuation systems 117

5.3.1 Information systems 119

5.3.2 Valuation capacity 121

5.3.3 Professional valuers associations 122

5.4 Conclusion 125

Notes 127

References 127

SECTION B VALUATION APPROACHES AND METHODS 129

6 Market Approach 131

6.1 Introduction 131

6.2 The comparison method 132

6.2.1 Collect comparable evidence of market transactions 132

6.2.2 Identification of value-significant

characteristics 134

6.2.3 Adjustment of value-significant

characteristics 139

6.3 Hedonic regression method 150

6.3.1 Simple linear regression 151

6.3.2 Multiple linear regression 156

Notes 168

References 168

7 Income Approach 173

7.1 Introduction 173

7.2 Income capitalisation method 174

7.2.1 Perpetual annuities (freeholds) 175

7.2.2 Annuities with a term certain (leaseholds) 179

7.3 Discounted cash-flow

method 183

7.3.1 A discounted Cash-Flow

valuation model 184

7.3.2 Perpetual annuities 190

7.3.3 Annuities with a term certain 193

7.4 Profits method 195

7.4.1 Method 196

Notes 204

References 204

8 Cost Approach 235

8.1 Introduction 235

8.2 Replacement cost method 236

8.2.1 Replacement cost 236

8.2.2 Depreciation 237

8.2.3 Land value 240

8.2.4 Application of the replacement cost method 242

8.2.5 Issues arising from the application of the replacement

cost method 243

8.3 Residual method 245

8.3.1 Basic residual technique 246

8.3.2 Basic residual profit appraisal 254

8.3.3 Discounted cash-flow

technique 255

Notes 260

References 260

SECTION C VALUATION APPLICATION 271

9 Valuation of Investment Property 273

9.1 Introduction 273

9.2 Analysis of rents 274

9.2.1 Rental lease incentives 274

9.2.2 Capital lease incentives 277

9.2.3 'Surrendered' leases 280

9.2.4 Repairs, insurance, and ground rents 281

9.2.5 Rent-review

pattern 283

9.3 Analysis of yields 284

9.3.1 Equivalent yield 284

9.3.2 Weighted average unexpired lease term 285

9.4 Market valuation of investment property 285

9.4.1 Voids and break options 285

9.4.2 Statutory considerations 288

9.4.3 Over-rented

properties 294

9.4.4 Turnover leases 296

9.4.5 Long lease investments 299

9.4.6 Synergistic value 299

9.5 Investment valuation of investment property 302

9.5.1 Inputs and assumptions 303

9.5.2 Investment valuation using a discounted cash flow 306

References 311

10 Valuation of Development Property 359

10.1 Introduction 359

10.2 Market valuation of development property 359

10.2.1 Comparison method 361

10.2.2 Residual method 362

10.3 Investment valuation of development property 369

10.3.1 Estimating the investment value of development property 369

10.3.2 Financial appraisals of development property 372

References 381

11 Valuations for Financial Statements and for Secured Lending 401

11.1 Valuing property for financial statements 401

11.1.1 Basis of reporting measurement 402

11.1.2 Property categorisation 403

11.1.3 Basis of value 405

11.1.4 Valuation 407

11.1.5 Other issues 411

11.1.6 Example valuations 413

11.2 Valuing property for secured lending purposes 415

11.2.1 Professional standards and guidance 416

11.2.2 Valuation methods for loan security valuations 420

11.2.3 Example valuation 420

11.2.4 Reinstatement cost assessment 424

Note 424

References 424

12 Valuations for Land and Property Taxation 449

12.1 Introduction 449

12.2 A land tax or a land and property tax? 450

12.3 Types of land and property taxes 452

12.3.1 Occupation taxes 453

12.3.2 Transfer and wealth taxes 455

12.3.3 Betterment taxation 455

12.4 Land and property taxation in england and wales 456

12.4.1 Occupation taxes 457

12.4.2 Transfer and wealth taxes 466

12.4.3 Betterment taxation in England 469

Notes 472

References 472

13 Valuations for Expropriation 477

13.1 Introduction 477

13.2 Valuation for expropriation 478

13.2.1 Valuing property rights that are to be taken or

extinguished 478

13.2.2 Valuing retained property rights 479

13.2.3 Valuing compensation for disturbance 479

13.2.4 Valuing customary and informal land for expropriation

purposes 480

13.2.5 Expropriation and non-market

value 481

13.3 Valuations for compulsory purchase and planning compensation

in England 482

13.3.1 Legal background 482

13.3.2 Compensation for land2 taken (compulsorily acquired) 483

13.3.3 Identifying the planning position 486

13.3.4 Compensation for severance and injurious affection 487

13.3.5 Compensation for disturbance and other losses 491

13.4 Planning compensation in England 493

13.4.1 Revocation, modification and discontinuance orders 493

13.4.2 Purchase notices 493

13.4.3 Blight compensation 494

Notes 494

References 495

14 Valuation Variance, Risk and Optionality 499

14.1 Introduction 499

14.2 Valuation accuracy and valuation variance 500

14.3 Analysing risk 502

14.3.1 Sensitivity analysis 503

14.3.2 Scenario modelling 504

14.3.3 Simulation 506

14.4 Flexibility and options 511

14.5 Uncertainty 513

References 515

Appendix A: Land Uses and Valuation Methods 525

Glossary 529

Index 000
Peter Wyatt is a Chartered Valuation Surveyor and Professor of Real Estate Appraisal in the Department of Real Estate & Planning at the Henley Business School, University of Reading, UK. He has developed and delivered national and international university programmes at all levels and led national, European, and international real estate research projects. His recent work with UK Government investigated the theory and practice of development viability appraisal in planning policy, and current work with the UN is focusing on the valuation of unregistered land.

P. Wyatt, Reader, Faculty of the Built Environment, University of the West of England