Academic literature on the topic 'Real estate and valuation services'

Research background: Based on the literature, several ways of assessing the conduct of business and a number of factors influencing the growth and development of the companies can be identified. However, the diversity of business entities and their business environment raises the importance of considering the unique nature of the industry in the selection of performance measures. Our research focuses on real estate valuation firms that provide information and consulting services to real estate markets. Purpose of the article: As professional practice shows, there are different business models for property valuation. These businesses differ in their organisational and legal form and the type of valuations performed, the type of client served, or the scope of services provided. The main purpose of the research is to identify factors that significantly affect the development odds of valuation companies in Poland, especially the growth of income. Methods: The study was based on data collected from the survey of Polish real estate valuers. The analysis was conducted on a sample of 277 professionals who own valuation companies and were certified no later than the end of 2014. A quantitative analysis using a logistic regression model was conducted to identify the factors that influence the prospects for valuation business growth. Findings & value added: The research confirms the relationship between the way of conducting real estate valuation activities and its development chances. The most important factors are a spatial and substantive range of services, cooperation and employment, and clients' profile. Demographic characteristics were also found to be significant. Although the results presented here are based on data from the real estate valuation industry, their relevance is much broader. The findings provide a better understanding of the factors that influence the performance and success of SMEs, particularly in the information and consulting industry.

Consumers, real estate agents, and real estate platforms are in conflict as the burden of brokerage fees increases due to the increase in housing costs and the expansion of proptech services. This study focuses on resolving conflicts among parties of real estate transactions, and especially analyzes how consumers evaluate the value of brokerage fees incurred when using brokerage services and direct brokerage services, a core field of prop-tech. The research method employed the virtual valuation method, which is commonly used to measure the value of non-market goods such as difficult-to-measure goods and services. As an empirical measurement technique, the double bounded dichotomous choice question model was utilized in this case. A survey was used to collect analysis data and divided into five types to increase the validity of the research results. In addition, the secured sample was able to estimate the willingness to pay for real estate brokerage services using the logit model, a quantitative analysis model to measure the value and acceptability of such services. The analysis results revealed that the estimated willingness to pay for brokerage fees was 2,581,370 won for sales and 970,185 won for lease transactions.

To operate in a dynamic environment, the success of real estate companies’ hinges, to a large extent, on their ability to deliver innovative, user-accepted products and services in a timely, seamless manner. The need for Information and Communication Technology (ICT) for secure, safe, and adequately serviced estate surveying and valuation practice is very pertinent to the profession. Therefore, this study assessed the level of usage of ICT in estate surveying and valuation practice in the study area with the view of improving real estate service delivery in Lagos Island, Nigeria. Data were gathered through a survey conducted with registered estate firms in Lagos Island, Nigeria. The data from the responses that were gathered were analysed using descriptive statistics and Relative Importance Index (RII) ranking. Findings revealed that the majority of the respondents are adopting ICT in carrying out their estate surveying and valuation practice. In addition, the results of the study established a positive correlation between improving estate surveying practice and the adoption of ICT. Furthermore, the findings also revealed the level of conversant with the use of real estate software has the highest RII while Artificial Intelligence software has the lowest RII. The study concluded that it is without a doubt that the degree of application of ICT in real estate has been very significant, but there are still barriers that limit its application within the sector. The study recommends that the estate surveyors & valuers in academia who are responsible for coaching core departmental courses include ICT into several aspects of the curriculum.

The principle behind sustainable city movements is represented by the idea of “good living”, which is the possibility of having solutions and services that allow citizens to live in an easy, simple, and enjoyable way. Policies for urban quality play a central role in the slow cities manifesto, often suggesting the use of Information and Communication Technologies (ITC) in the development of interactive services for citizens. Among these, an interesting possibility is to offer citizens digital real estate consultancy services through the implementation of automated evaluation methods. An automated appraisal action—which is already complex in itself owing to the need to collect data in a consistent, standardized, but also differentiated way so as to require the adoption of real estate due diligence—collides on the operational level with the concrete difficulty of acquiring necessary data, much more so since the reference market is dark, atypical, and viscous. These operational difficulties are deepened by the epistemological nature of the appraisal discipline itself, which bases its methodology on the forecast postulate, recalling the need to objectify as much as possible the evaluation from the perspective of an intersubjective sharing argument. These circumstances have led, on the one hand, to the definition of internationally accepted uniform evaluation rules (IVS, 2017) and, on the other, to the testing of automated valuation methods aimed at returning computer-based appraisals (AVM). Starting from the awareness that real estate valuation refers essentially to information and georeferences, this paper aims to demonstrate how real estate appraisal analysis can be further improved through information technology (IT), directing real estate valuation towards objectivity in compliance with international valuation standards. Particularly, the paper intends to show the potential of combining geographic information systems (GISs) and building information models (BIMs) in automated valuation methods through the depreciated reproduction cost. The paper also proposes a BIM-GIS semi-automatic prototype based on the depreciated reconstruction cost through an experimentation in Rende (Italy).

The majority of present-day aggregators of the Russian real estate market fail to meet modern requirements and trends. Currently, the information support of real estate valuation activities is generally assigned to individual values, rather than the valuation community as a whole. The absence, insufficiency, unreliability of the market information makes it difficult to determine the cadastral value of the properties as well fulfill the requirements prescribed by the existing methodological recommendations. The main problem in developing digital platforms is that the value of the digital platform proposition can only be adequately assessed by the platform developer, while the complexity of creating a quality digital platform may exceed the benefits for the developer. In this regard, we set a goal to analyze the aggregators of the real estate market in terms of the shortcomings, whose systematization is to lay the basis for a consolidated real estate market database of Russian Federation. In this article, selected digital platforms were analyzed with regards to meeting specified criteria using a multi-criterial rating system. The results of the study represent the necessary criteria, conclusions concerning compliance with certain criteria based on the analysis of classifieds, as well as recommendations for the use of innovative technologies to ensure the most advanced operation of real estate market aggregators. In addition, several forms of information exchange between market players and viable solutions to common problems are suggested. A method of developing a consolidated real estate market database was developed. It is based on innovative information technologies and the actionable way of implementing software solutions designated for automation and structuring of real estate data.

Real estate practice is a strategic and multi-faceted vocation that connects the clients/owners of real estate projects or products with end users in the building industry. Different aspects of real estate practices require collaboration of real estate practitioners who are professional estate surveyors and valuers, with the built environment professionals and other stakeholders at different levels in order to achieve the transaction objectives. This study, therefore, examined the practice with a view to uncovering the preparedness of the estate surveyors and valuers with respect to the knowledge and application of supply chain management in real estate practices. Empirical data were collected with the aide of questionnaires administered to respondents from the 373 estate firms in Lagos State, Nigeria of which 291 were duly completed and returned constituting 78% rate of response. The Readiness Assessment Model was adapted to determine the operational preparedness of the estate surveying and valuation firms to implement supply chain management with regards to management readiness, employee readiness, services/processes readiness and logistic/ICT readiness on a 5-point Likert scale and the corresponding mean score and relative importance was determined. The Kolmogorov Smirnov Test of Normality was performed and showed that the data was normally distributed. Hence, the Pearson Product Moment Correlation analysis was used to determine the relationship between knowledge and application of supply chain management in real estate businesses. It was observed, among others, that the knowledge of supply chain management is generally low among estate valuers and does not necessarily translate to application in the property market transactions of real estate firms. The study further observed that management and employees of estate surveying and valuation firms do not have adequate knowledge of the principles and practices of supply chain management for productive engagement in property market transactions. This was further identified alongside others such as confidentiality, stiff rivalry and economic instability as critical factors resisting the adoption of supply chain management in the property market. The study therefore suggested capacity building programmes on supply chain management for the estate surveyors and valuers to improve the knowledge of the strategy and harness the benefits.

Abstract Strong links between the condition of the environment and the economy have recently resulted in a number of actions aiming to implement environmental considerations in economic calculations. This is accompanied by the development of the concept of ecosystem services, characterizing the benefits that the environment provides humankind with. The identification of these services is reflected in their economic values. Hence, the concept of the valuation of ecosystem services. Therefore, if the service provided by the environment takes on a financial value, we can consider it as income from the property containing the analyzed ecosystem. Of course, in order to speak in practice of the income approach in the valuation of such properties, there must be actual financial flow as income for the real estate owner. However, in the era of big economic changes and the implementation of a number of financial instruments (e.g., subsidies for a particular use of property, trade of CO2 emission rights), it seems reasonable to consider the possibility of property valuation by the valuation of ecosystem services. A part of this research focused on a service of forest ecosystems service that is carbon sequestration. The selection was made due to the implementation of the climate policy at the European level and its association with the trade of CO2 emission rights. The analyses were performed for two test sites characterized by different determinants (composition of species in the tree stand, age of the stand, degree of compactness of the tree stand, etc.). The low level of difficulty of the test methods used enables non-experts (persons with no qualifications in forestry) to carry out valuations themselves. The research is a contribution to the debate on the possibility of accounting for carbon sequestration in forest property valuation based on the income approach, but the issue still requires clarification of certain elements.

The purpose of the article is to reveal the peculiarities of real estate taxation of individuals in the countries of the world and to develop recommendations for its improvement in Ukraine. The features of taxation of real estate of individuals in the USA, Germany, Sweden, Poland, Bulgaria, Italy, France, Great Britain, Lithuania and others are presented. The advantages and disadvantages of taxation of real estate of individuals in the countries of the world are identified. Attention is focused on methods for determining the cadastral / assessed value of real estate for taxation. The necessity of reforming the system of taxation of real estate of individuals in Ukraine has been proved. The introduction of a cost approach to the appraisal of real estate in Ukraine requires a number of sequential actions: centralization of management and maintenance of the real estate cadastre in one state governing body; development of regulatory support for the creation and operation of the State cadastre of real estate, the mechanism and methods of state cadastral valuation; inventory of real estate objects with the assignment of a cadastral number; formation of the system of the State cadastre of real estate. The approaches to the establishment of tax exemptions on real estate of individuals in the countries of the world and in Ukraine have been investigated. In Ukraine, the basis for taxation of real estate of individuals should be the cadastral / assessed value of real estate with its gradual approach to the market value. The introduction of a cost approach to the appraisal of real estate in Ukraine requires: centralization of competences in one state governing body; development of regulatory support for the creation and functioning of the State cadastre of real estate, the mechanism and methods of state cadastral valuation; inventory of real estate objects with the assignment of a cadastral number; formation of the system of the State cadastre of real estate; taking into account the experience in the formation of the Land Cadastre, it is necessary to ensure the transparency of the tax on real estate of individuals through digitalization of tax services and administration processes (obtaining in electronic form a certificate of the cadastral / estimated value of property by cadastral number or postal address, paying tax for the Electronic Cabinet, having access to information on the procedure for calculating tax on each property, tax rates, the availability of benefits, debts, payment history, etc.). When levying a tax on real estate, it is necessary to assess feasibility of applying tax incentives in terms of differentiating the standard of living of the population in Ukraine in order to protect socially unprotected segments of the population. Property tax benefits for individuals should be linked to the cadastral / assessed value of the property by establishing a non-taxable minimum amount of the assessed value of the property and apply to only one residential property where the owner permanently resides.

According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced the commercial property sector’s dependence on bank financing The CMBS market has been one of the most dynamic and fastest-growing sectors in the capital markets, for a market which was virtually nonexistent prior to 1990. The global CMBS market issuance which stood at AU$5.1 billion (US$4 billion) in 1990 had grown to AU$380 billion (US$299 billion) by the end of 2006. In Australia, a total of over 60 CMBSs with nearly 180 tranches totalling over AU$17.4 billion had been issued to December 2006 from when they were first introduced in 1999. To date few studies have been done on Australian CMBSs outside the credit rating agency circles. These studies are predominantly practitioner focused (Jones Lang LaSalle 2001; Richardson 2003; Roche 2000, 2002). O’Sullivan (1998) and Simonovski (2003) are the only academic studies on CMBSs. As such, this thesis examines issues relating to the development of Australian CMBSs and quantitatively and qualitatively analyses the structuring of Australian CMBSs. In assessing the growth of the Australian CMBS market, an interpretive historical approach (Baumgarter & Hensley 2005) is adopted to provide a cogent review and explanation of features of international and Australian CMBSs. This helps to understand the changing nature of the market and provides better understanding of the present and suggests possible future directions. The Australian CMBS market is matured in comparison with the larger US and EU CMBS markets as seen by the diversity of asset classes backing the issues and transaction types, tightening spreads, and record issuance volumes. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent.

It can be stated that where a valuation is used as an assessment of risk there is no research-backed theory of valuation, that is one that explains the methodology used and is validated by a hypothesis. The significance of this thesis is the recognition of the ignorance, and confusion that exists and the need of a theory to explain methodology verified by a hypothesis or hypotheses. This thesis is the result of systemic research in an attempt to define the confusion that exists, resulting from the application of inappropriate economic theories in valuation. This research also attempts to find the reason for and the source of the confusion. This research supports that which has previously been advocated that valuation principles of valuation Practice must be underpinned by a working theory embedded in positive economics. The finding of this paper is that price theory is an appropriate proxy for valuation theory where a valuation is used as an assessment of the recovery of funds. However importantly this research also recognises and examines the possible ability of other related economic theories to explain areas price behaviour where price theory cannot. The findings of this research are likely to have important implications in the valuation profession. Hopefully this will result in stimulating debate and a realisation of a need for a theory which supports a credible and validated process of valuation.

This Diploma Theses deals with services offered by the domestic estate agencies. They are related to the main activities of an estate agency, which are selling and purchasing real estate. Based on the purposes mentioned above, different means of valuating needs to be applied. A purchaser needs an estimation of a usual market price of the real estate in order to obtain a mortgage loan. A seller needs an expert’s opinion (the administrative price) for quoting the property tax. The Diploma Theses has been divided into two parts. The first part is theoretical and the second is practical. The theoretical part deals with quoting a market price of real estate. I have focused on quoting market prices for the needs of banks to grant loans and credits. Valuating, which has been described in the theoretical part, has been applied on some concrete real estate from 2008 and 2009. The aim of the practical part is to investigate the hypothesis that administrative prices are at the same level with market prices. Based on the generalised results of the investigation from years 2008 and 2009, I have tried to describe some possible development of the prices.

This study investigates the relation between accounting depreciation bias and equity valuation in a unique industry setting, Real Estate Investment Trusts (REITs). REITs report funds from operations (FFO), an industry standardized pro forma performance measure that is computed by excluding the depreciation expense of real properties from GAAP net income. Researchers have examined short-period samples and found inconclusive results on the relative ability of FFO and GAAP net income to explain the market value of equity. This dissertation attempts to explain their results by finding that depreciation expense, the largest reconciling item between FFO and net income, has different biases over the phases of real estate business cycles. This study uses modeling techniques to develop an industry-specific valuation model for REITs. In this model, the difference between the valuation coefficients on FFO and depreciation expense captures accounting depreciation bias and varies over the phases of real estate cycles. This model presents a theoretical link between accounting depreciation bias and the relative ability of FFO versus net income to explain the market value of equity. Using the REIT valuation model, this study empirically examines the impact of real estate cycles on accounting depreciation bias and on the relative ability of FFO and net income to explain the market value of equity. This study finds that FFO explains stock prices better than net income does in a market boom and that there is no significant difference in explanatory power between FFO versus net income in a market bust. Further results indicate that the valuation coefficients on FFO and depreciation expense have opposite sensitivities to a state variable that summarizes information on the real estate cycle phase during a year. These results partially reconcile the mixed results of prior studies across different time periods.

Determinar a viabilidade e a prioridade de investimentos potenciais é um passo crítico para a tomada de decisões no âmbito empresarial. O método mais difundido e aceito mundialmente para análise de projetos é o Fluxo de Caixa Descontado (FCD), onde o valor do projeto é determinado pelo Valor Presente Líquido (VPL). No entanto, o FCD não reflete o valor da ação gerencial, maximizadora de resultados, assumindo implicitamente que a firma detém passivamente seus ativos reais (projetos). Sendo este método, portanto, muito limitado para tratar de incertezas e flexibilidades e levando freqüentemente a decisões equivocadas. Considerado por muitos renomados autores um novo paradigma na avaliação de investimentos, a Teoria de Opções Reais (TOR) veio complementar a teoria do FCD, exercendo um papel de ponte entre a intuição estratégica e o rigor analítico. Este trabalho tem por objetivo não somente apresentar algumas das várias flexibilidades existentes em projetos de incorporação imobiliária, como também mostrar como calcular seu valor de forma simples, intuitiva e adequada aos principais problemas de investimento enfrentados por empresas incorporadoras no seu dia a dia. A abordagem de avaliação de investimentos utilizando a TOR possibilita o entendimento das flexibilidades e incertezas inerentes ao processo de incorporação, auxiliando na elaboração de contratos com terceiros e provendo preciosos insights sobre negócios e investimentos estratégicos cada vez mais importantes devido ao acelerado ritmo de mudança econômica.
In an enterprise scope, one critical step in the decision making process is the determination of potential investments feasibility and priority. Worldwide the most accepted method for evaluating a project is the Discounted Cash Flow (DCF), where the value of the project is given by the Net Present Value (NPV). However, the DCF does not reflect the value of managerial action, which maximizes results, assuming implicitly that the firm manages its real assets (projects) passively. Therefore, this method is too limited to deal with uncertainties and flexibilities and often leads to wrong decisions. Considered by many respected authors as a new paradigm in investment valuation, the Real Options Theory is viewed as a complement to standard DCF analysis which bridges the gap between strategic intuition and analytical rigor. This work aims not only to introduce some of the many flexibilities that exist in real estate development projects, but also to show how to evaluate projects in a simple and intuitive manner suitable for the investment decisions that developers face day by day. The Real Options approach provides the understanding of the flexibilities and uncertainties inherent to the project development process, assisting in contract making with third parties, as well as providing precious insights about businesses and strategic investments, insights that are more important than ever given the rapid pace of economic change.

Problem: Problemet som legat till grund för intresset och inriktningen med denna magisteruppsats är då tidigare kontorsfastigheten Skatteskrapan skulle byta ägare och användningsområde. En planerad ombyggnad ställde till problem med avseende på uppskattningen av ombyggnadskostnader. I slutändan handlar problemet om ett värderingsproblem. Detta problem tillsammans med andra ex-empel där fastigheter bytt användningsområden har väckt ett intresse att göra en ingående undersökning av det svenska fastighetsvärderingsområdet. Denna uppsats är indelad i fem olika delundersökningar. Initialt sker en presentation av svenska metoder för fastighetsvärdering. Vidare under-söks olika faktorer som har olika värdepåverkande effekter på fastighetsvärdet. Därefter genomförs en undersökning av hur nya användningssituationer kan vålla värderingsproblem samt hur ett värde fastställs i en sådan situation. Nästa steg består utav en undersökning av internationella värderingsmetoder. Studien avslutas sedan med en undersökning av nya trender som utvecklats inom fastighetsvärderingen.

Syfte: Syftet med denna magisteruppsats är att studera fenomenet fastighetsvärdering via svenska fastighetsvärderare för att erhålla en förståelse för hur de resonerar vid valet av värderingsmetod och bestämmer det slutliga värdet. Dessutom är syftet också att belysa relationen mellan svenska och internationella värderingsmetoder för att utröna likheter och skillnader.

Metod: Vi har valt en kvalitativ metod i form av åtta intervjuer. En förstudie, i form av en intervju, görs med professor Stellan Lundström, vilken ämnar till att ge en uppdaterad bild av forskningen inom området. Därefter hålls sju intervjuer med auktoriserade fastighetsvärderare. Värderarnas synpunkter analyseras sedan tillsammans med resultat från förstudien, teoretiskt ramverk samt tidigare studier. Analysen är baserad på en modifierad tankemodell som är skapad av forskaren Jan Matts-son. Genom denna modell har sedan fem viktiga nivåer, knutna till uppsatsens problemområde, analyserats.

Slutsats: Vi fann att de svenska värderingsmetoderna i stort sett utgörs av tre olika metoder. Dessa är avkastningsmetod, ortsprismetod samt produktionskostnadsmetod. De viktigaste värdepåverkande faktorerna var fastighetens läge samt dess skick och standard. Även hyreskontrakten och vakanser påverker till stor del. Beslut om ny användningssituation kan tas av olika anledningar. Det största problemet relaterat till denna förändring är uppskattningen av framtida kostnader, där ombyggnadskostnader utgör den största svårigheten. De internationella värderingsmetoderna är överlag de samma som de svenska. Kulturella skillnader föreligger i vilka metoder som används i olika situationer. De viktigaste nya trenderna är effekten av de internationella redovisningsstandarderna. En annan trend är det ökade användandet av automatiska analysverktyg.

Problem: The underlying problem within this Master of Science thesis is the emanating issues from the changed owner and usage situation of the former Tax Department. A planned reconstruction led to difficulties in estimating the reconstruction costs. In the end this problem is an appraisal issue. This problem led to an interest to make a thorough investigation of the area of Swedish real estate appraisal. The thesis is constituted by five different subinvestigations. Initially an exploration is made concerning Swedish real estate appraisal methods. Further, factors affecting the real estate value are examined. This is followed by an investigation of what appraisal issues that might occur in a new usage situation and how the value is estimated in such a situation. The relation between Swedish and International appraisal methods is then illuminated. The final investigation is concerning what new trends that have occurred on the Swedish real estate appraisal market.

Purpose: The purpose of this Master of Science thesis is to study the phenomenon real estate appraisal via Swedish real estate appraisers to gain an understanding of how they reason when choosing appraisal method and determine the real estate value. Additionally, the aim is also to highlight the relation between Swedish and International real estate methods to reveal differences and similarities.

Method: We have chosen a qualitative method taking the form of eight interviews. A total of eight interviews are performed. The study is offset by a pre-study with a professor at RIT, Stellan Lundström. The aim with this interview is to get an updated view of the latest research within real estate appraisal. This is followed by seven interviews with certified real estate appraisers. The results from the interviews with the appraisers are analysed together with the pre-study, theoretical framework and previous studies. The analysing process is based upon a modified thought model, originally developed by the researcher Jan Mattsson. The analysing process is presented in five steps that all are connected to the modified thought model and related to the problem area of this Master of Science thesis.

Conclusion: We found that the Swedish appraisal methods generally are constituted by three methods. These are the avkastnings method, the ortspris method and production cost method. The most influent factors on the real estate value are the location as well as the condition and standard. Also the rent contracts and vacancies to some extent affect the value. A rather large problem originates in the estimation of future costs, where the estimation of reconstruction costs is referred to as the largest issue. The international appraisal methods are equivalent to the Swedish methods. The largest differences are of cultural kind mostly caused by differences in legislation. New trends that are presented are the impact of the international accounting standards (IAS). Another significant trend is the increased use of automatic real estate analysis tools.

In this thesis two dierent problems regarding real options are studied. The rst paper discusses the valuation of a timing option in an irreversible investment when the underlying model is incomplete. It is well known that in a complete model there is no nite optimal time at which to invest if the underlying asset, in our case the value of the developed project, does not pay out any strictly positive cash ows. In an incomplete model, the situation is dierent. Depending on the market price of risk in the model, there could be an optimal nite investment time even though the underlying asset does not pay out any strictly positive cash ows. Several examples of incomplete models are analyzed, and the value of the investment opportunity is calculated in each of them. The second paper concerns the valuation of random start American perpetual options. This type of perpetuate American option has the feature that it can not be exercised until a random time has occured. The reason for studying this type of option is that it provides a way of modelling the initiating of a project, e.g. the optimal time to build on a piece of land, which can not occur until a permit, or some other form of clearance, is given. The random time in the project application represents the time at which the permit is given. Two concrete examples of how to calculate the value of random start options is given.

QC 20160607

Given the nature of the valuation task environment appraisers are often made aware of previous value opinions rendered by appraisers, commonly in the form of an historic appraisal. And, because an appraisal task involves the rendering of market value, a hypothetical, unobservable construct based on probabilities, direct feedback against this objective is typically not possible. Alternate signals derived from the task environment such as confirmation of previous appraised values may be employed, thereby potentially altering the appraiser’s perception of the valuation objective leading to divergence from the normative model. The real estate behavioral literature suggests commercial appraisers have been susceptible to anonymous value opinions of experts, often times resulting in biased valuation judgments. This research is the first to focus on decision support tools as a technique to eliminate systematic biases in the appraisal process. The study focuses on the value opinion of an anonymous expert as a source of potential bias, because the value opinion of an anonymous expert is a common non-sanctioned source of influence representing a clear departure in the normative appraisal process. To operationalize the research hypotheses a two-factor randomized experiment to investigate the stated research hypotheses was conducted.

The textbook contains theoretical and methodological materials and didactic units for evaluating real estate, machinery, equipment and vehicles, enterprises (businesses), intangible assets, tasks, case studies, tests and applications. Meets the requirements of the Federal state educational standards of higher education of the latest generation. To prepare bachelors in the areas of 38.03.01 " Economics "and 38.03.02" Management", analytical services of enterprises and specialists in property valuation.

Strategic adaptability is essential in capitalizing on future investment opportunities and responding properly to market trends in an uncertain environment. Customized products or services are an important source of revenue for many companies, particularly those working with in a mass customization environment where customer satisfaction is of paramount important. In this paper, we extend methods from mass customization and product family design to create specific methods for universal product family design. The objective of this research is to propose a valuation financial model to facilitate universal design strategies that will maximize the expected profit under uncertain constrains. Real options analysis is applied to estimate the valuation of options related to introducing new modules as a platform in a universal product family. We use customers’ preferences based on performance utilities for universal design to reflect demand and demographic trends. To demonstrate implementation of the proposed model, we use a case study involving a family of light-duty trucks. We perform sensitivity analysis to investigate the behavior of the estimated option value against chaining system parameters.

Recognizing the widespread concern that disruptions created by technology have not yet benefited middle- and low-income households, this study explores the potential of PropTech to positively impact the housing challenges in the region, with a particular focus on the poor or vulnerable populations. This study reveals several emerging trends that offer insight to those thinking about digital transformation in the housing and real estate sector for Latin America and the Caribbean and serve as the foundation for more research. PropTech startups are defined broadly as fast-growing actors that are developing technology-based business models for housing real estate markets. This includes companies operating on most phases of the housing value chain, from the housing units supply side (land, construction, access to services, and home improvement) to the demand side (financing, renting, buying, selling, and commercializing units). PropTech startups mainly address two key issues in the traditional real estate market: lack of transparency and processes inefficiencies. Reducing costs and making information available equalizes the markets playing field. The opportunity for PropTech startups to develop business models that cover lower income brackets is still largely unexplored. Currently, profitable businesses are mostly serving high-income bracket groups. Thus, large-scale solutions that would make investing in the low-income segment profitable remain an opportunity for PropTech companies to target. Also, opportunities remain for startups to explore housing solutions that strengthen adaptation to climate change and curb harmful environmental impact through technology innovations through retrofitting efforts or the repurposing of existing units. The report pays special attention to the different links in the value chain and highlights success stories that are having an impact on the current housing market, resulting in a snapshot of scalable, private-sector-led solutions currently deployed to solve pressing housing problems in the region.

Macroeconomic Summary Overall inflation (1.61%) and core inflation (excluding food and regulated items) (1.11%) both declined beyond the technical staff’s expectations in the fourth quarter of 2020. Year-end 2021 forecasts for both indicators were revised downward to 2.3% and 2.1%, respectively. Market inflation expectations also fell over this period and suggested inflation below the 3% target through the end of this year, rising to the target in 2022. Downward pressure on inflation was more significant in the fourth quarter than previously projected, indicating weak demand. Annual deceleration among the main groups of the consumer price index (CPI) was generalized and, except for foods, was greater than projected in the October report. The CPI for goods (excluding foods and regulated items) and the CPI for regulated items were subject to the largest decelerations and forecasting discrepancies. In the first case, this was due in part to a greater-than-expected effect on prices from the government’s “VAT-fee day” amid weak demand, and from the extension of some price relief measures. For regulated items, the deceleration was caused in part by unanticipated declines in some utility prices. Annual change in the CPI for services continued to decline as a result of the performance of those services that were not subject to price relief measures, in particular. Although some of the overall decline in inflation is expected to be temporary and reverse course in the second quarter of 2021, various sources of downward pressure on inflation have become more acute and will likely remain into next year. These include ample excesses in capacity, as suggested by the continued and greater-than-expected deceleration in core inflation indicators and in the CPI for services excluding price relief measures. This dynamic is also suggested by the minimal transmission of accumulated depreciation of the peso on domestic prices. Although excess capacity should fall in 2021, the decline will likely be slower than projected in the October report amid additional restrictions on mobility due to a recent acceleration of growth in COVID-19 cases. An additional factor is that low inflation registered at the end of 2020 will likely be reflected in low price adjustments on certain indexed services with significant weight in the CPI, including real estate rentals and some utilities. These factors should keep inflation below the target and lower than estimates from the previous report on the forecast horizon. Inflation is expected to continue to decline to levels near 1% in March, later increasing to 2.3% at the end of 2021 and 2.7% at year-end 2022 (Graph 1.1). According to the Bank’s most recent survey, market analysts expect inflation of 2.7% and 3.1% in December 2021 and 2022, respectively. Expected inflation derived from government bonds was 2% for year-end 2021, while expected inflation based on bonds one year forward from that date (FBEI 1-1 2022) was 3.2%.