Property Investment Analysis Report

Property Investment Analysis ReportContent1 Summary22 The Valuer/Client Relationship and Proposals22.1 Concern22.2 Manllison’s Recommendation32.3 Evaluation33 Valuation Methods, Proposals and Discussion63.1 Research into Valuation Methods63.1.1 All-risks Yield63.1.2 Discount Cash Flow (DCF) Techniques63.1.3 Comparative Analysis Techniques73.1.4 Pricing Structure83.1.5 Profits or Accounting Methodologies83.1.6 Evidence83.2 Discussion of Proposals on Property Investment94 Ownership Interest Valuation104.1 Properties with Trading Potential114.2 Total Earnings Method114.3 Reversionary Investment124.4 Descounted Cash Flow(DCF)135 The Incorporation of DCF into the Proposals135.1 The Incorporation of DCF into the Mallinson Recommendations135.2 The Incorporation of DCF into the Carsberg Recommendations15Bibliography161 SummaryMallinson Report and the Carsberg Report presented the valuation profession with a number of comprehensive and far reaching proposals. If implemented, would represent a significant change in the way in which many valuations and appraisal are to be undertaken, presented and justified. We discussed how these recommendations are incorporated into property investment analysis and the subsequent methods. A case of ownership interest is valued using conventional term and reversion approach and DCF.

DCF is further discussed for it is better incorporated into the recommendations.

2 The Valuer/Client Relationship and Proposals2.1 ConcernThe Mallinson report (1994) concerns with the valuers clearly understand the needs of the client at an early stage. The range of client is enormous; there are those who have already and great understanding of property, and those wholly unfamiliar with property, the property market and the terms and concepts used by valuers.

For the variety of clients, it is the valuer’s accountability to make (1) Calculations of a notional transaction price constructed in a universal, formal, widely understood, and wherever possible realistic manner. (2)Calculations of the price for which a property might actually be traded if put to the open market in a manner and timeframe prescribed. (3) Calculations of price in special circumstances. (4) Calculations of worth to be compared with price. (5)Calculations of...