Solutions to the five key brownfield valuation problems

Abstract

PurposeThe purpose of this study is to solve five key brownfield valuation problems.Design/methodology/approachThis aim is achieved by using doctoral research on integrating the scientific process into the appraisal process. The first objective is demonstrating why four of the problems require solutions prior to solving the first problem, a valuation procedure for formerly used sites. A second objective is to use empirical data from appraisals to reveal why existing methodology is not reliable – because it does not solve the four problems.FindingsThe resulting findings are that a developmental model that incorporates the Triad approach to quantifying environmental uncertainty, initially used in the USA, simulates a process used by buyers to establish the price paid for brownfields with contaminated land.Practical implicationsThe practical implication that results from this research is that valuers need to emulate the buyer's process when valuing this property type. Prescriptive procedures for valuation requiring the use of scientific methods, as used in the Triad process, need to be set forth to quantify the atypical uncertainties in valuing this property type. The results of this research should be of significant interest to all stakeholders that are involved in brownfield redevelopment, so that they can insure that their needs will be met by improved feasibility analysis.Originality/valueThis research is unique in that it is the first empirical test of the reliability of the valuation of brownfields that need to undergo a time‐consuming and often expensive soil remediation process.