Our valuation methodology

We choose the valuation approach that best fits the property's characteristics, the purpose of the assignment and the quality of available evidence.

Market approach

We compare the subject property with similar transactions or relevant listings, analyse reliability and adjust for differences in location, area, shape, use, access, transaction date, condition and planning characteristics. The most relevant evidence receives appropriate weight.

Cost approach

We estimate land value and the cost of the buildings and improvements, allowing for physical depreciation, functional obsolescence and external economic effects. Replacement cost considers equivalent utility; reproduction cost considers replicating the original property.

Income approach

For income-producing real estate, expected future benefits are converted into present value. Direct capitalisation uses annual net operating income and an appropriate market-derived capitalisation rate. Discounted cash flow analysis forecasts cash flows over a defined period and discounts them at a rate reflecting the property's risks.

Income and expense analysis

• Rental income and lease terms
• Occupancy and vacancy
• Operating expenses
• Expected growth
• Capitalisation or discount rate
• Terminal value, where relevant

Choosing the appropriate approach

Every assignment is different. We use one or more approaches where appropriate and explain the selection, evidence and reasoning in the valuation report.