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Corporate asset managers are increasingly confronted with the escalating costs, regulatory pressures and disclosure requirements associated with the ownership of contaminated real estate. Corporations historically have been reluctant to sell, or even engage upon site investigation for, their contaminated or potentially contaminated real estate assets. Traditional efforts to address these concerns raise complex legal issues and fail to define or limit liability. Efforts to remediate these properties have often led to projects with ever increasing costs and, in the end, more lingering liability than many corporate directors had been willing to accept. New strategies and management tools are available to assist corporate real estate managers with identifying which environmentally affected real estate assets may be ripe for sale. Similarly, environmental insurance is being considered with increasing frequency as a tool to mitigate risk and facilitate the sale of contaminated and potentially contaminated property. This paper explores, with concepts and examples, how corporate real estate managers can effectively implement these tools to unlock value from underutilised real estate assets.

While numerous studies have been carried out in the US to determine the character and scope of the effects of contaminated, threatened or “stigmatized” properties on the terms and availability of debt financing, little appears in the published literature dealing with the attitudes, policies and requirements of equity investors. Hence, the extent of opposition from both institutional lenders and equity investors toward contaminated property is still uncertain. This paper summarises the results of parallel studies undertaken within New Zealand (NZ) and the USA to answer the question of how those who lend on, and invest in, property affected or impacted by contamination perceive the risks associated with this type of investment and evaluate its impacts. Of particular interest are the perceived effects of on‐site contamination on property investment and its financing.

The purpose of this study is to solve five key brownfield valuation problems.

This 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.

The 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.

The 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.

This 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.

This paper seeks to reduce the lack of quantitative research by addressing diminution in value to non‐residential property resulting from environmental contamination.

This meta‐analysis extracts data from approximately a dozen peer‐reviewed articles and 100 case studies from real estate appraisers in the USA. A dataset containing 106 contaminated non‐residential observations is examined using Regression (OLS). Forward (stepwise) and backward selection was performed. The dependent variable included percentage loss and dollar amount. The independent variables were contamination type, US region, land use type, distance from the source (mostly contaminated subjects), passage of time, year, urban or rural, market conditions, litigation, and indemnification.

The model adjusted R squares range from 37 percent to 66 percent. Approximately a third of cases had no loss. This research used petroleum case studies as the reference category for comparison with other types of contamination. The following variables were statistically significant in all four models: Creosote/PCB and Other contamination. The following were significant in two models: Other land use, 30‐year mortgage rate, Rural location, TPH, Multiple contamination, TCE, Under‐remediation, and Mineral extraction region. Finally, the following variables were significant in one model at least at a 90 percent level of confidence: Heavy metals, Industrial Midwest region, and pre‐1995 sale.

Properties in the remediation phase show less of a loss in value. Selective case studies within the same period of the clean‐up cycle make the best comparables. The US regional location was less important.

This is the first empirical research using a meta‐analysis to study damage effects for non‐residential property affected by contamination.

UK government policy regarding the clean‐up of contaminated land favours treatments which are appropriate to the actual or proposed use of the land. This suitable‐for‐use approach predicates against the total removal of contaminated soil and in favour of in situ remedies. Any in situ treatment, whether it comprises containment of the contamination or changing its physical characteristics through chemical or biological methods, will leave behind some degree of residual risk. This risk may take many forms, for example the appropriateness or otherwise of the concentrations of materials left on treated sites, the possible failure of the treatment method and the potential for future changes in legislation. If valuers are to prepare valuations of sites, both before and after treatment, which adequately reflect the true situation and do not seek to avoid the influence of past contamination, then they need to be able to assess the risks associated with the site. In a numerically small market, and with limited information as to past contamination and treatment methods, valuers need to place considerable reliance on their professional judgements. Discusses possible guidelines which may be adopted in the treatment of affected sites for residential, industrial, commercial and leisure uses. Discusses the perceptions of valuation and development professionals through the results of questionnaire and interview surveys. Considers the “stigma” implications in respect of contaminated land values, both before and after remedial treatment, and attempts to place land contamination into context with other, everyday environmental issues. Proposesd a list of potentially contaminative industrial uses and ranks these in order of perceived hazard. Proposes a multi‐disciplinary approach with a view to the adoption of a risk assessment method for the appraisal of contaminated land.

This study aims at identifying the consequences of adopting statutory rather than market basis in assessing damages due to contamination to land. Most valuations undertaken to assess compensation for damages due to contamination on land are done with valuation methods prescribed by law for the compulsory acquisition of land.

A total of 80 registered valuation firms with experience in both compulsory acquisition and damage assessment participated in a questionnaire survey to ascertain the methods adopted in valuing when determining the compensation payable as damages due to land contamination and the need for a framework for such valuations, in addition to some archival documents relating to the relevant laws and some purposively selected valuation reports, which were reviewed.

The results of the analysis indicate that the use of compulsory acquisition valuation methods results in inadequate damages, which engenders conflicts among the stakeholders. The absence of any framework for damage assessment is responsible for the current practice in the Niger Delta, and it is recommended that international best practices utilising market basis of valuation be adopted.

Most valuation methods available are useful for valuing commercial properties regularly traded in the market and not applicable to the Niger Delta, which is mostly rural with very few market transactions. It is expected that this study will enable oil and gas industry operators, professional valuers advising the land owners or operators in the industry and the government to differentiate compensation paid for compulsory acquisition and compensation required to placate those suffering losses due to contamination.

The findings will assist professional valuers to be more professional in valuing contaminated land devastated by oil spills.

Adopting the findings will engender a greater acceptability of the results of valuations undertaken in the wake of an oil spillage disaster and ensure a peaceful environment for the oil operators and the entire populace.

The findings of this study are expected to assist policymakers in emerging economies and professional valuers acting in these environments to avoid precipitating crises by adopting inappropriate valuation techniques when assessing damages due to contamination. This study is original and has not been published elsewhere.

Increasing litigation involving land contamination and an escalation in the number of incidents where property owners have suffered financial losses from these cases has resulted in negative impacts on property values and greater risks associated with investments in contaminated property. To date, there has been little systematic research on the valuation methodology that accounts for these risks. To help address this, two similar surveys were undertaken within New Zealand (NZ) and the United Kingdom (UK), the results of which are summarised here. The survey instruments were designed to determine what the respondents are currently doing when providing advice or producing valuations to account for the financial risks associated with investing in contaminated properties. It is hoped that the survey results will aid the process of developing “best practice” methodologies for use by valuers.

There has been much discussion in the academic and practitioner press about the valuation of contaminated land. Most of this discussion has centred upon the various techniques that can be used to determine an “appropriate figure” and what the effect, if any, might be of contamination “stigma”. Despite a re‐emergence in recent times of papers discussing professional liabilities in other aspects of valuation practice (particularly concerning bank loan valuations), there has been little discussion about the possibility of negligence being committed by valuers of contaminated land. The professional body which represents most professional valuers in the UK, the Royal Institution of Chartered Surveyors (RICS) has issued guidance for the benefit of its members which attempts to clarify the complexities of law and valuation methodology which exist in this area. It has been suggested that due to the complex nature of the valuation of contaminated assets, as evidenced by the quantum of papers on this matter, many practising valuers might still not be discharging the professional duty to an adequate degree. This paper seeks to determine whether this is an accurate suggestion by verifying the existence and clarity of the guidance and then investigating both whether professional practitioners are familiar with it and implement it. Existing literature and case law are referred to in order to assist these tasks and a questionnaire survey to 400 practitioners was administered. The paper concludes that levels of valuers’ competence in this area, as measured against an objective standard, is often very low and that many valuers are possibly negligent when acting for clients with an interest in a potentially or actually contaminated site. Assessment and monitoring of professional competence in this area is recommended.

The emerging trend in the global real estate valuation practice has led to the development of advanced valuation approaches to replace the traditional methods. The purpose of this paper is to investigate the extent to which real estate valuers practicing in Nigeria are aware and use these advanced approaches in real estate valuation practice.

Both traditional and advanced approaches were identified from the literature. An online-based questionnaire survey was administered on estate surveyors and valuers to measure their level of awareness and frequency of use of the identified valuation approaches. The feedback was collated and analyzed using descriptive statistical analysis.

The professionals are mostly aware of the traditional methods and always use the “sales comparison method” in practice. In contrast, they are not very aware of the advanced approaches and hence, only use the hedonic pricing model occasionally in practice.

The study only focuses on the Lagos metropolis, a nationwide survey will produce more comfortable generalizable findings.

This is a wake-up call for the real estate regulatory bodies and indeed all the real estate professionals in Nigeria to embrace the use of the advanced valuation approaches in practice, in order to remain relevant in the international real estate practice.

Implementation of the recommendations of this study could help position the Nigerian real estate professionals and the industry for a global exposition.

The “stigma” associated with remediated contaminated land is the blighting effect on property value caused by perceived risk and uncertainty. Uncertainties relate to negative intangible factors such as the inability to effect a total “cure”, the risk of failure of the remediation method, the risk of changes in legislation or remediation standards, the difficulty in obtaining finance, or simply a fear of the unknown. Post‐remediation “stigma” is the residual loss in value after all costs of remediation, including insurance and monitoring, have been allowed for. It equates to the difference in value between a remediated contaminated site and a comparable “clean” site with no history of contamination. The initial results from a study of the market sales data of post‐remediated vacant residential land along the Swan River, in Perth, Western Australia, from 1992‐1998 are summarized. The aim of this ongoing research is to estimate the amount of “stigma” arising from a site’s contamination history and measure the effect of this on residential property values of remediated property. The results show that while a site’s contamination history impacts negatively on property prices, the price decreases are offset by the positive influence on price from additional amenities provided in the case study neighbourhood.