Unlocking value: The impact of traditional valuation practices on the number of vacant retail units in the built environment

Abstract

Across the social science and humanities disciplines, there has been an increased interest in questions of value and valuation. This article responds to the new emphasis by scrutinising the evolution of real estate valuation techniques over time, their embedded nature, and the implication of this for the (re)production of the built environment. This is achieved through the lens of two conceptual positions which are rarely used in the realm of real estate valuation. These are (a) path dependency which in this case charts the evolution of the discipline of valuation as it relates to retail related real estate assets; and (b) lock – in, which seeks to understand how valuation techniques and attitudes have become embedded during this evolution. This position sits alongside a series of investigatory interviews with professional valuers in international real estate organisations specialising in the commercial real estate market. This is often a missing voice in recent research into real estate and the wider subject of valuation. Findings suggest that valuation practice is reliant on confirmatory market practices that do not necessarily capture the contemporary affordability-based requirements of tenants. Instead, practice is locked into reinforcing the nature of zone-based market values for landlords and investors. The geographical implications of this situation at the micro-level can be vacant or poorly performing properties that undermine local areas in the interest of maintaining the headline value of properties in macro-level global capital markets. This new conceptual analysis provides understanding of how the physical built environment is developed and reproduced over time through notions of value, helps to connect often hidden practices of real estate valuation into existing academic debates in urban studies and geography, and in conclusion sheds some light on how practices of real estate valuation can be improved in the disrupted world of retail.