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This paper examines the effect which the rent assessment process has on the level of rents and rental values in the commercial property market in England and Wales, by asking: is there an accepted definition of open market rental value which is consistently adhered to, irrespective of the context in which the rent is assessed? How, in theory, do the procedures by which an assessment of open market rental value is arrived at differ as between a new letting, a lease renewal, and a rent review? Is there any evidence to suggest that any theoretical differences in the operation of the various rent assessment procedures are borne out in practice? In particular, is there any evidence that in new lettings and lease renewals lease terms are changed after the rent has been finalised? Is there any evidence to demonstrate that there are different levels of rent which are sufficiently consistent to be referable to the context in which the rent was assessed? If so, does this produce difficulties in the valuation process which may not be presently fully appreciated? In addition to a review of the relevant literature, the primary research undertaken for the study was a survey of surveyors and solicitors involved in commercial lettings and rent reviews and the compilation of a database of rental valuations and transactions.

Reconsiders some of the market issues surrounding the over‐rented property valuation problem and extends the discussion to the valuation of self‐financing properties where the market yield exceeds that of long‐dated stocks. Emphasizes the problem of using long‐term implied growth rates in market conditions where short‐term conditions of no growth or indeed continuing decline may have significant impact on value. Concludes with the suggestion that those who support a DCF approach to valuation have still to convince the market of their case. There is also a need for further study in all areas associated with implicit valuation and explicit DCF valuations in particular in relation to the determination of all risk yields, determination of target rates, assessment of market rental value and the degree to which the market can accept valuations based on the judgement, intuition, or experience of a valuer in times of minimal comparable market evidence.

There is a continuing discussion about whether German valuation methods are inaccurate and inferior to the British standard, and the enduring efforts for a European and internationally standardised valuation method and value definitions intensify this discussion. The German valuation system is said to lead to valuations which do not reflect actual market conditions and excessive smoothing. Not surprisingly, German surveyors usually disagree and claim that the German valuation approach, with its sustainable rental value, fulfils not only its purpose but is more transparent and thus superior to the approach usually applied in UK. The purpose of this paper is to discuss the recently adjusted German valuation methods.

The paper analyses the German valuation methods and highlights the predominant differences to the British valuation standards.

The paper shows that the discussed valuation methods should lead to comparable results. The legal framework of the German valuation approaches can therefore not be blamed for any of the observed empirical phenomenon.

The paper discusses the recently adjusted German valuation methods.

The value of land for development is normally estimated by the use of the comparative method or the residual approach. The aim of the paper is to examine appraisal practice, in particular the bases of valuation, availability and utilisation of data, reporting of the value figure and the management of risk.

The paper reports the findings of a survey of valuers from leading practices throughout the UK, bank lenders and developers. An example of an appraisal of an urban regeneration site is included in order to highlight the key issues within the discussion.

A variety of reporting practices is found from a tightly drawn range of values to single‐point estimates along with a detailed explanation of the assumptions employed. Developers and lenders favoured the latter, but they appeared to be open‐minded about a range of values or an expression of uncertainty being reported, provided that there is a clear and well supported justification. Risk management approaches are underdeveloped within the profession.

The valuation of urban regeneration land is said to be one of the most vexed issues in the appraisal of projects due to a lack of data transparency in urban regeneration markets, shortcomings in traditional appraisal methodologies and complexities of public sector grant procedures.

Summary The ability of valuers to correctly assess available information and impound it into valuations is essential for the operation of an efficient property market. If valuers are doing a good job then they will take into consideration that information which is relevant to the type of valuation being undertaken. In this sense the market is efficient. No market is, however, completely efficient otherwise it would be impossible to earn abnormal returns. There is, therefore, sufficient incentive for investors to acquire costly information in order to improve performance. These issues are central to understanding the role of valuation models and clearly point to the need to improve both the collection and economic interpretation of information.

Time on the market (TOM) has been widely tested in the US real estate literature using listing and selling data of houses captured in the multiple listing services (MLSs). Unfortunately in the UK there are no MLSs so it is not possible to undertake similar analyses. The approach adopted in this paper differs from traditional TOM analyses in that it focuses on the speed or time the market takes to correct for information differences between open market valuations and traded prices. In this context the paper introduces the concept of equilibrium time on the market (ETOM). The study therefore adopts a different approach to estimating TOM and in addition also examines the phenomenon within the UK commercial real estate sector. Based on a simple present value model, the time taken for the difference between an appraiser's estimate of open market value and known selling prices define our time on the market under equilibrium market conditions. Using the annualised UK Investment Property Databank all‐property total return index for a sample period of 17 years between 1983 and 1999, the average ETOM was estimated to be 8.4 months. This figure, however, varied and depended on market conditions.

In the last few years a number of large operational companies in the United Kingdom have chosen to segregate the management of their property holdings from the day‐to‐day running of their core business. This has either been achieved by forming property sections within the main company structure, or in some cases the hierarchy has been more clearly defined by the formation of subsidiary companies feeding into the parent company. The operational arm would then pay the property subsidiary an open market rental for each property that they occupy. The advantage of separating the property function from the core business is twofold. First, it allows the performance of each operational outlet to be measured on the same basis; and second, the investment performance of the properties themselves can now be measured. However, for the latter to occur, the properties need to be valued as investments and not as owner occupied. Under current RICS regulations this is not allowed and any property subject to an inter‐company let must be valued as if the lease agreement did not exist. Investigates the effect of the RICS guidelines on the valuation of properties let to related companies and highlights the problems of measuring the performance of the company′s property assets against a suitable benchmark.

Monetary instability presents property valuers with particular problems. My view of the current situation is that of a practising valuer, but one who, since 1973, has also participated with other members of the profession in work to identify these problems, and to draft and publish valuation standards and guidance notes for valuers throughout the UK. No less important is the continuing work of keeping these standards under review and, where necessary, of updating them, together with the appropriate guidance notes to the profession.

Over the last eight or nine years something closely akin to a revolution has taken place in the production of standards and guidelines intended both to assist the surveyor in day to day practice and to inject a measure of consistency into the market. Perhaps the most notable contribution has been made by the founding fathers of the Asset Valuation Standards Committee of the Royal Institution of Chartered Surveyors, without whose good offices the valuation profession might well have found itself subject to regulation externally imposed and its role diminished in the eyes of other professional advisors acting on behalf of business clients. One of the cornerstones of the Guidance Notes produced by the AVSC is its definition of open market value, and it is with the general concept of open market value, or rather with one particular aspect of it, that this brief note is concerned.

Outlines the three principal types of valuation of plant and machinery – insurance, financial and open market. Discusses the techniques appropriate to each and possible future development in the field. Concludes that the demand for plant valuation services is increasing and suitably qualified students need to be persuaded to opt for what is probably the least known discipline within the profession.