Commercial Property Valuation

2 dny
Praha, hotel NH Prague
    Attend this intensive 2-day training program and learn:
  • How valuers use traditional and modern methods to appraise property
  • The differing approaches to valuing the various property types
  • What is meant by an IVS compliant valuation report?
  • How to interpret the results through better understanding of the underlying inputs and assumptions
  • Valuations of development sites
  • The role of property in mixed investment portfolios
  • Current trends in the pan-European property market
Course Description:
Real estate valuation reports can be opaque and difficult to decipher and yet are a crucial element of the world of investment and development. This course will develop skills by taking participants through the process of preparing commercial property valuations. Participants will be introduced to basic valuation approaches and how to identify the key drivers of real estate value. Building on the initial theory, more sophisticated methods will be covered that combine in the production of high-quality valuation reports.

Each session will provide an insight to the valuation profession looking at the procedures followed by property valuation experts. Day 1 will introduce you to the main concepts, offering an overview of the methodologies employed in the appraisal of real estate as well as the main regulatory frameworks. Day 2 will provide an opportunity to examine practical examples before looking at property as an investment asset class and the nature of multi-property asset investment portfolios.

What is the goal of this training?
This training will be of interest to practicing and novice valuers, as well as those that use valuation reports and stakeholders in the real estate investment process. The training will also bridge the gap between users of property valuation reports and the valuers who prepare them. This will ensure the instruction and report processes will run smoother, saving time and expense. You will learn the relevance of real estate as an investment medium, particularly relevant as the availability and sophistication of property investment products continues to grow.

Who should attend?
  • Investors
  • Fund Managers
  • Asset Managers
  • Property Analysts
  • Real Estate Financers
  • Valuation Professionals
Each session comprises classroom teaching combined with interactive group exercises and discussions, typically accompanied by a case study.

09.15 - 12.30

Session 1: Introduction to Property Valuation

  • Run through of topics for the two days.
  • Warm up exercise - "Why do we need to value property?"
  • Property as an Asset
  • Market conditions in CEE
  • Introduction to methods of property valuation
  • Overview of main organisations that regulate Real Estate Valuation, IPMS, Ethics

  • Case study: Consideration of comparable buildings - what features drive value?

Session 2: Commercial Real Estate valuation methods and bases

  • Commercial Real Estate valuation methods
  • UK model - 5 traditional methods of valuation plus modern methods
  • US/International model - 3 approaches
  • How methods affect value
  • Growth implicit methods v Growth Explicit methods
  • Worth v Price v Value
  • Valuations for secured lending, valuations for financial reporting

  • Case study: Comparison of methods

12.30 - 13.30 Lunch

13.30 - 17.00

Session 3: Starting small - valuation of a single-let property (Investment method)

  • Consider and compare lease terms
  • Calculation of a suitable capitalisation rate
  • Valuation Arithmetic (PV, Year's Purchase, growth)
  • Initial yield
  • Reversionary yield
  • Equivalent yield
  • Equated yield

  • Case study: Valuation of a single-let investment opportunity, calculation of equivalent and equated yields

Session 4: Growth Explicit Models of Valuation

  • Cash flow for real estate investments
  • Discount rate
  • Net Operating Income
  • Discounted Cash Flow (DCF) model for RE
  • Internal Rate of Return v NPV
  • Worth or Value, Appraisal or Valuation?

  • Case study: Valuation of single-let investment using modern methods, comparison and discussion

Day Two

09.00 - 12.30

Session 5: Development Valuation

  • Warm up exercise - "Value sensitive factors - discussion"
  • Stages of development
  • Traditional Methods
  • Modern Methods
  • Comparison

  • Case study: Valuation of development site

Session 6: Multi-let properties

  • Valuing multi-let assets
  • WAULT and Running yield
  • Valuation specifics by property type - inherent differences between the main sectors

  • Case study: Shopping centre valuation - qualitative v quantitative measures and their effects on valuation

12.30 - 13.30 Lunch

13.30 - 17.00

Session 7: Risk and return in Valuation Approaches

  • Portfolio Management
  • Property Portfolio Measurement
  • Quantitative and Qualitative approaches
  • Practical risk analysis
  • Scenarios and Simulation
  • Prioritising major variables
  • Property Performance analysis

  • Case study: Examination of a property portfolio

Session 8: Properties within a portfolio

  • Property's place in a multi-asset portfolio - discussion
  • Europe's newest institutional asset class - Residential
  • True Equivalent Yield/ Quarterly (or monthly) in advance
  • Cross-border valuation - International differences

Final Activity: Closing remarks, open discussion, questions

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