Property valuation / Peter Wyatt.

By:

Wyatt, Peter, 1968-

Material type: Text

TextPublication details: Chichester, West Sussex : Wiley-Blackwell, 2013.Edition: Second editionDescription: xiv, 474 pages : illustrations (some color) ; 25 cmISBN:

1119968658 (paperback)
9781119968658 (paperback)

Uniform titles:

Property valuation in an economic context

Subject(s):

DDC classification:

333.33 WYA

Holdings
Item type	Current library	Call number	Copy number	Status	Date due	Barcode
Standard Loan	Moylish Library Main Collection	333.33 WYA (Browse shelf(Opens below))	1	Available		39002100513184

Enhanced descriptions from Syndetics:

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 & Answers for students: see www.wiley.com/go/wyattpropertyvaluation 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.

Includes bibliographical references and index.

Table of contents provided by Syndetics

Preface (p. xiii)
Acknowledgements (p. xv)
Part A Property Value and Property Valuation (p. 1)
1 Microeconomic Concepts (p. 3)
1.1 Supply and demand, markets and equilibrium price determination (p. 3)
1.2 The property market and price determination (p. 6)
1.2.1 Rent for land (p. 6)
1.2.2 Land use rents (p. 8)
1.2.3 Land use intensity (p. 12)
1.3 Location and land use (p. 14)
1.4 The economics of property development (p. 22)
1.4.1 Type and density of property development (p. 22)
1.4.2 The timing of redevelopment (p. 25)
Notes (p. 28)
References (p. 29)
2 Macroeconomic Considerations (p. 31)
2.1 The commercial property market (p. 31)
2.2 Property occupation (p. 33)
2.3 Property investment (p. 34)
2.4 Property development (p. 43)
2.5 Property and the wider economy (p. 44)
References (p. 48)
3 What is Property Valuation (p. 49)
3.1 Introduction (p. 49)
3.2 The need for valuations (p. 50)
3.2.1 Types of property to be valued (p. 52)
3.2.2 Bases of value (p. 57)
3.3 Determinants of value (p. 60)
3.3.1 Property-specific factors (p. 60)
3.3.2 Market-related factors (p. 66)
3.4 Valuation procedures (p. 69)
3.4.1 Terms of engagement (p. 71)
3.4.2 Inspections and investigations (p. 71)
3.4.3 Valuation report (p. 73)
3.5 Measurement (p. 73)
Appendix - Inspection checklist (p. 76)
Notes (p. 81)
References (p. 81)
4 Valuation Mathematics (p. 83)
4.1 Introduction (p. 83)
4.2 The time value of money (p. 84)
4.2.1 Single period investments (p. 85)
4.2.2 Multi-period investments (p. 86)
4.2.3 Tax (p. 93)
4.3 Yields and rates of return (p. 94)
4.3.1 Yields (p. 95)
4.3.2 Rates of return (p. 96)
4.3.3 Yields and rates of return (p. 98)
References (p. 99)
Part B Valuation Methods (p. 101)
5 Comparison Method (p. 103)
5.1 Introduction (p. 103)
5.2 Sources of data (p. 104)
5.3 Comparison metrics (p. 106)
5.3.1 Relative value of retail ground floor 'zones' (p. 107)
5.4 Comparison adjustment (p. 110)
References (p. 114)
6 Investment Method (p. 115)
6.1 Introduction (p. 115)
6.2 All-risks yield (ARY) methods (p. 117)
6.2.1 Valuation of rack-rented freehold property investments (p. 117)
6.2.2 Valuation of reversionary freehold property investments (p. 119)
6.2.3 Valuation of leasehold property investments (p. 127)
6.2.4 Example: ARY Investment method (p. 134)
6.3 Discounted cash-flow (DCF) methods (p. 135)
6.3.1 A discounted cash-flow valuation model (p. 136)
6.3.2 Applying the DCF valuation model (p. 142)
Notes (p. 157)
References (p. 157)
Further reading (p. 158)
7 Profits Method (p. 161)
7.1 Introduction (p. 161)
7.2 Method (p. 162)
7.3 Example of a profits method valuation (p. 166)
7.4 Summary (p. 169)
Notes (p. 170)
References (p. 170)
8 Replacement Cost Method (p. 171)
8.1 Introduction (p. 171)
8.2 Method (p. 172)
8.3 Application (p. 178)
8.3.1 Valuation of an owner-occupied property for accounts purposes (p. 178)
8.3.2 Valuation for insurance purposes (p. 178)
8.4 Issues (p. 178)
8.4.1 Definitional problems (p. 179)
8.4.2 Methodological problems (p. 181)
8.5 Summary (p. 184)
Notes (p. 185)
References (p. 186)
9 Residual Method (p. 187)
9.1 Introduction (p. 187)
9.2 Conventional residual land valuation (p. 188)
9.3 Problems with the residual method (p. 199)
9.4 Cash-flow residual model (p. 202)
References (p. 206)
10 Automated Valuation Models and Computer-Assisted Mass Appraisal (p. 207)
10.1 Introduction (p. 207)
10.2 Method (p. 207)
10.2.1 Simple linear regression (dependence of one metric variable on another) (p. 208)
10.2.2 Multiple linear regression (dependence of one variable on two or more variables) (p. 211)
10.3 Example (p. 215)
10.3.1 Data (p. 215)
10.3.2 Descriptive statistics (p. 216)
10.3.3 Simple linear regression (p. 216)
10.3.4 Multiple linear regression (p. 220)
10.4 Multiple regression analysis: Research and applications (p. 226)
10.4.1 Computer-assisted mass appraisal (p. 228)
10.4.2 Automated valuation models (p. 229)
10.5 Advantages and disadvantages of regression-based valuation (p. 230)
Notes (p. 231)
References (p. 231)
Part C Valuation Applications (p. 233)
11 Lease Pricing (p. 235)
11.1 Introduction (p. 235)
11.2 Lease incentives (p. 236)
11.2.1 Rent-free periods (p. 237)
11.2.2 Capital contributions (p. 241)
11.2.3 Premiums and reverse premiums (p. 242)
11.3 Alternative lease arrangements (p. 246)
11.3.1 Stepped rents (p. 246)
11.3.2 Turnover rents (p. 247)
11.3.3 Short leases and leases with break options (p. 249)
11.4 Valuations at rent review, lease renewal and lease end (p. 252)
11.4.1 Rent reviews (p. 252)
11.4.2 Surrender and renewal of leases (p. 253)
11.4.3 Compensation for disturbance and improvements (p. 255)
11.4.4 Example 1 (p. 256)
11.4.5 Example 2 (p. 259)
Notes (p. 262)
References (p. 263)
12 Valuations for Financial Statements and for Secured Lending Purposes (p. 264)
12.1 Valuing property for financial statements (p. 264)
12.1.1 Financial reporting standards and valuation bases (p. 265)
12.2 Methods of valuing property assets for financial reporting purposes (p. 272)
12.2.1 Example valuations (p. 274)
12.3 Valuations for lending purposes where the loan is secured against commercial property (p. 279)
12.3.1 Example (p. 281)
Notes (p. 285)
References (p. 286)
13 Valuations for Taxation Purposes (p. 287)
13.1 Capital gains tax and corporation tax (p. 287)
13.1.1 Grant of a long lease out of a freehold or long leasehold interest (p. 294)
13.1.2 Grant of a short lease out of a freehold or long leasehold interest (p. 295)
13.1.3 Grant of a short lease out of a short leasehold interest (p. 296)
13.2 Inheritance tax (p. 297)
13.3 Business rates (p. 299)
13.3.1 Rental comparison (p. 302)
13.3.2 Profits method (p. 303)
13.3.3 Contractor's method (p. 304)
Note (p. 306)
References (p. 306)
14 Valuations for Compulsory Purchase and Compensation (p. 307)
14.1 Compensation for land taken (compulsorily acquired) (p. 308)
14.2 Compensation for severance and injurious affection (p. 311)
14.2.1 Compensation where part of an owner's land is acquired (p. 311)
14.2.2 Compensation where no land is taken (p. 314)
14.3 Disturbance compensation (p. 315)
14.3.1 Case study (p. 316)
14.4 Planning compensation (p. 317)
14.4.1 Revocation, modification and discontinuance orders (p. 318)
14.4.2 Purchase notices and blight notices (p. 318)
14.5 A note on CGT and compensation for compulsory acquisition (p. 319)
Notes (p. 320)
References (p. 321)
15 Specialist Valuations (p. 322)
15.1 Operational entities or 'trade-related' properties (p. 322)
15.1.1 Hotels, guest houses, bed &c breakfast and self-catering accommodation (p. 322)
15.1.2 Restaurants, public houses and nightclubs (p. 324)
15.1.3 Care homes (p. 328)
15.1.4 Petrol filling stations (p. 330)
15.1.5 Student accommodation (p. 331)
15.1.6 Serviced offices (p. 332)
15.1.7 Data centres (p. 335)
15.2 Valuation of contaminated land (p. 335)
15.3 Synergistic value (p. 339)
15.3.1 Physical merger (p. 339)
15.3.2 Legal merger (p. 339)
15.4 Special Purpose Valuations (p. 340)
15.4.1 Charitable Valuations (p. 340)
15.4.2 Local authority disposals of land for less than best consideration (p. 341)
Notes (p. 341)
References (p. 342)
16 Investment Valuations - Further Considerations (p. 343)
16.1 Short leases and leases with break clauses (p. 343)
16.2 Over-rented property investments (p. 346)
16.3 Valuation accuracy, variance and uncertainty (p. 349)
16.3.1 Valuation accuracy (p. 349)
16.3.2 Valuation variance (p. 350)
16.3.3 Valuation uncertainty (p. 352)
16.3.4 Sensitivity analysis (p. 353)
16.3.5 Scenario testing and discrete probability modelling (p. 356)
16.3.6 Continuous probability modelling and simulation (p. 359)
16.3.7 Arbitrage (tenant yield approach) (p. 363)
Notes (p. 368)
References (p. 369)
Part D Appraisal (p. 371)
17 Investment Appraisal (p. 373)
17.1 Introduction (p. 373)
17.2 Appraisal information and assumptions (p. 375)
17.2.1 Rent and rental growth (p. 375)
17.2.2 Target rate of return (p. 377)
17.2.3 Holding period (p. 380)
17.2.4 Exit value (p. 381)
17.3 Appraisal methodology (p. 381)
17.3.1 Payback method (p. 381)
17.3.2 Yield (p. 382)
17.3.3 DCF methods of investment appraisal (p. 383)
17.3.4 Example (p. 393)
17.4 Risk analysis in property investment appraisal (p. 395)
17.5 Financing property investment (p. 398)
Notes (p. 401)
References (p. 401)
18 Development Appraisal (p. 403)
18.1 Introduction (p. 403)
18.2 Conventional residual profit appraisal (p. 403)
18.2.1 Profit as a percentage of cost (p. 405)
18.2.2 Development yield (p. 406)
18.2.3 Criticisms (p. 406)
18.3 Cash-flow profit appraisal (p. 408)
18.3.1 Criticisms (p. 412)
18.4 Development risk (p. 413)
18.4.1 Risk analysis (p. 414)
18.4.2 Risk management (p. 427)
18.5 Development finance (p. 429)
18.5.1 Borrowers of development finance (p. 429)
18.5.2 Type of finance (p. 430)
18.5.3 Sources of development finance (p. 431)
18.5.4 Duration of funding (p. 432)
18.5.5 Typical development finance structures (p. 433)
18.5.6 Gearing (p. 439)
18.5.7 Risk management in property financing (p. 439)
18.5.8 Finance accounting (p. 441)
18.5.9 Sales revenue (p. 444)
Notes (p. 452)
References (p. 453)
Glossary (p. 454)
Index (p. 460)

Author notes provided by Syndetics

Peter Wyatt, Senior Lecturer Director of Undergraduate Programmes Real Estate Planning, Henley Business School, the University of Reading has developed and delivered national and international university programmes at all levels, has published widely in leading real estate journals and has published two text books. Dr Wyatt is involved with and has lead national, European and international real estate research projects. On-going work with UK Government is investigating the theory and practice of development viability appraisal in planning policy, focusing on the issue of development value and planning gain.