Valuation Flashcards
What is VPS 1?
Terms of Engagement.
What is VPS 2?
Inspections/Investigations
What is VPS 3?
Valuation Report.
What is VPS 4?
Bases of value, assumptions and special assumptions.
What is VPS 5?
Valuation approaches and methods.
What are the 3 valuation approaches?
Market, income and cost
What are the 5 methods of valuation?
Comparable, investment, residual, DRC, R and E.
What are difference models of valuation?
Term and reversion, hardcore and top slice, discounted cash flow.
What are the different valuation bases?
Market Value, market rent, investment value/worth, fair value.
What is market value?
Defined in the Red Book as EWAMP. Estimated amount an asset should exchange on the valuation date between willing parties, in an arms length transaction, after proper marketing, where both parties acted knowledgeably, prudently and without compulsion.
Definition of market rent?
EWAMP + appropriate lease terms
What is an assumption?
Assumptions are matters that, by agreement, are reasonable to accept as fact without verification.
What is a special assumption?
An assumption that either assumes facts that differ from the actual facts existing at the valuation date or that would not be made by a typical market participant. Often used to illustrate the effect of changes in circumstances on value.
What is CAT A fit out?
Basic finish. I.e in an office - raised floors and suspended ceilings, basic mechanical and electrical services including lighting and air conditioning, a fire detection system and basic internal finishes.
What is Cat B fit out?
The tenant will bring a building from Cat A condition into a Cat B fit out. This will likely include the installation of kitchens and tea points, partitioning, rerouting of air conditioning and power points and addition of IT infrastructure.
