Property Investment Appraisal Research Articles

The significance of real estate development process analysis to residential property investment appraisal in Abuja, Nigeria

ABSTRACTArising from the lack of consensus as to development process that is being used by the real estate developers, this study examined the real estate development process analysis to residential property investment with a view to determining significant stages that affect real estate investment appraisal in Nigeria. Close ended questionnaire was used to obtain information from real estate developers in Abuja. The respondents were asked to score on the Likert scale their level of involvement with the development process and its effect on residential development process analysis. The data were then computed using mean scores and relative importance indices. Results showed that the development phases above the mean value of 3.63 were considered as the significant stages in the development process. Also, the effect on development phases to successful residential property development appraisal was ranked as an increased in the final cost of the project (3.38), followed by the changed in time frame (3.33). The findings revealed that the study is one of the few attempts that investigated the development process being adopted in residential property development and this provides an insight into the real estate development decision-making process.

Perception Portfolio Problem in Property Investment Appraisal - Case of Energy Infrastructure Assets

Energy facility presence can be understood as an intangible property characteristic. However, little research has been conducted on its importance in the context of property asset pricing. Existing appraisal approaches for energy facility presence are often grounded on the intuition that house buyers demand a financial compensation for living near such a facility, implicit price. This study provides an overview of the existing empirical literature on the property value impact of nuclear, wind, biomass, and biogas energy facilities. Evidence suggests that general statements concerning the implicit price of energy facility presence may not hold true because this presence is a location-specific phenomenon.

Property investment appraisal

Property investment appraisal

Property Investment Appraisal (3rd edition)20081Andrew Baum and Neil Crosby. Property Investment Appraisal (3rd edition). Oxford: Blackwell 2008.

Property Investment Appraisal (3rd edition)20081Andrew Baum and Neil Crosby. <i>Property Investment Appraisal (3rd edition)</i>. Oxford: Blackwell 2008.

Property Investment Appraisal

ABSTRACTThis paper considers the application of discounted cash flow (DCF) techniques to the analysis of the property investment market. The traditional method of property valuation is briefly outlined and its shortcomings highlighted. An alternative DCF procedure is derived to calculate the present value of a property investment. This method will be familiar to actuaries, but is not always used in property disciplines. The sensitivities of this formulation to changes in the force of real interest, force of real rental growth and force of inflation are derived. It is suggested how these formulae may be used for property investment appraisal and risk analysis. We conclude that DCF offers a more flexible and accurate means of estimating the value of a property, and that property valuers, financial economists and actuaries should work jointly to develop practical DCF methods. However, so long as traditional methods of valuation prevail, a rational investor must use both methods to identify mispriced property assets. There have been few property contributions to the actuarial literature in the United Kingdom; this paper is intended to build on the few previous papers and suggests directions for future work.

The Practice of Property Investment Appraisal: Reversionary Freeholds in the UK

Provides an indication of the results of a large‐scale survey of the application of investment valuation techniques to the reversionary freeholds in UK practice. Identifies trends in the use of methods in practice for both market valuation and analysis of worth/price purposes. Concludes the use of growth explicit techniques is confined to the analysis role and that the conventional term and reversion approach to market valuation is being supplanted by equivalent yield and layer methods.

RISK‐EXPLICIT APPRAISAL: A SLICED INCOME APPROACH

Property investment risk is traditionally accounted for by valuers in a risk‐adjusted discount rate approach, although this term, popular in mainstream finance, is rarely used. This paper shows that RADR is but one of several risk adjustment techniques that may be employed within an explicit cash flow framework. It explains how a certainty equivalent technique may be used in an objective manner by use of standard deviation analysis, and develops a new technique for use in the UK prime market known as the sliced income approach. The paper goes further by setting risk adjustment (deterministic) techniques within the wider context of risk analysis and compares a simple probabilistic approach and sensitivity analysis with these techniques for use in property investment appraisal. A case study is employed in illustrations.