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Article
Publication date: 1 December 1998

Sarah Sayce and Owen Connellan

The valuation and management of landed properties owned by public authorities provides a useful case study for developing arguments relating to the “test of a good…

Abstract

The valuation and management of landed properties owned by public authorities provides a useful case study for developing arguments relating to the “test of a good valuation” and in particular the inter‐relationship between purpose and method of valuation. The paper reviews the changing requirements placed on the valuation process and the growing and recognised need for valuers to be cognisant of the difference between the concepts of value‐in‐exchange (market price valuations) and value‐in‐use (calculations of worth) and to question the underlying purpose of valuations in the management process. Research work by the authors highlights the difficulties in accommodating these changes in the field of publicly‐owned leisure properties. The paper concludes that such valuations as have been prepared for leisure properties do not aid good management and are peripheral to the management decision‐making process. It suggests that for valuations to gain relevance to managers of owner‐occupied property, new concepts should be debated. In the public sector, “social value” is postulated as one avenue worthy of exploration.

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Property Management, vol. 16 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 January 1993

Owen Connellan and Richard Baldwin

Outlines a new classification system for buildings and proposesthat a new methodology, discounted asset rents (DAR), is used to addressthe situation. Notes that it has…

Abstract

Outlines a new classification system for buildings and proposes that a new methodology, discounted asset rents (DAR), is used to address the situation. Notes that it has long been accepted that cost can be a valid basis for valuing ‘no market′ properties. Mentions the contractors test, as used in rating, and techniques for ascertaining depreciated replacement costs. Finally a practising valuer comments on the findings of the research.

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Journal of Property Valuation and Investment, vol. 11 no. 1
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 1 December 1997

Owen Connellan

Local authorities are now constrained to produce asset valuations for accounting and management purposes. Specialized property, for which there is little or no market, has…

Abstract

Local authorities are now constrained to produce asset valuations for accounting and management purposes. Specialized property, for which there is little or no market, has to be valued under the RICS Red Book using the depreciated replacement (DRC) basis. Reviews the consequent requirements of local authorities and the valuation techniques available for producing capital and rental figures, including the latest “S curve rental” method.

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Property Management, vol. 15 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 October 2002

Sarah Sayce and Owen Connellan

This paper debates the key concepts of fair value, value in use and existing use, as they relate to the valuation of owner‐occupied property assets. Changes to the…

Abstract

This paper debates the key concepts of fair value, value in use and existing use, as they relate to the valuation of owner‐occupied property assets. Changes to the professional body regulatory and advisory frameworks (International Valuation Standards Committee (IVSC), the European Group of Valuers’ Association (TEGoVA) and the Royal Institution of Chartered Surveyors (RICS)) controlling the valuation of fixed assets for balance‐sheet have taken place. These, it argues, require valuers to re‐appraise the role of existing use value (EUV) as an acceptable valuation concept. The treatment of owner‐occupied property differs with the IVSC no longer recognising EUV, which it holds to be contrary to the principles of fair value, as enshrined within International Accounting Standards. Yet, the basis is still recognised by TEGoVA, which also espouses fair value, whereas the RICS prefer the value to the business model. The crux therefore lies in the interpretation of fair value. This paper argues for the abandonment of EUV in UK and European standards, to fall in line with International Standards. It is contended that, if market value or value in use is the only acceptable approach to accounting valuations, this will have implications for corporate entities and may give their advisers some practical problems. If EUV is abandoned, it also calls into question the appropriateness of DRC (depreciated replacement cost) as a valid surrogate of market value or EUV. The paper contends that fair value embraces both value in exchange and value in use. It argues that EUV fulfils little useful purpose and calls for its abandonment and for the development of an agreed methodology for establishing value in use. In the quest for this it suggests that there would be merit in re‐exploring the notion of going concern value, which was effectively written out of UK practice with the introduction of RICS guidance.

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Property Management, vol. 20 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 October 2002

Sarah Sayce and Owen Connellan

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Property Management, vol. 20 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 December 1994

Owen Connellan

When valuing “no market” properties using the cost approach, one of thefundamental problems is the reflection of “age‐related” depreciation inthe appraisal process. The…

Abstract

When valuing “no market” properties using the cost approach, one of the fundamental problems is the reflection of “age‐related” depreciation in the appraisal process. The uncritical use of straight‐line depreciation produces illogical results and a new methodology “discounted assets rent” (DAR) is introduced to overcome these difficulties: site values based on existing use should not be depreciated per se in the process. A new software program (DAR) has incorporated these facilities as a “user‐friendly” valuation tool.

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Journal of Property Valuation and Investment, vol. 12 no. 4
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 1 February 2002

Frances Plimmer, William McCluskey and Owen Connellan

Since 1993 the UK has used a “banded” property tax as opposed to discrete values for the assessment of residential property. Explains both the advantages and disadvantages…

Abstract

Since 1993 the UK has used a “banded” property tax as opposed to discrete values for the assessment of residential property. Explains both the advantages and disadvantages of the system. In addition, summarises the main results of empirical research into the use of banded property values which have been unaltered for ten years. In summary, aims to present findings on the continued operation of this unique system, highlighting strengths and weaknesses and its viability/applicability in other countries and jurisdictions in the light of empirical evidence based on the analysis of open market transactions. Discusses both the assessment and administration process and, with the analysis of sales data, demonstrates the importance of regular and frequent revaluations of the tax base in order to ensure a reasonable level of both vertical and horizontal equity. Speculates on the potential application of a banded system of property values in other countries, in the light of the advantages of the banded system which could lend themselves to jurisdictions where an ad valorem system of land taxation is inappropriate; where resources are limited in terms of experienced valuers, or where the availability of technology to undertake mass appraisal would provide added advantages. Concludes by drawing together recommendations in relation to how the system in the UK can be improved and makes recommendations for policy‐makers in other jurisdictions.

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Journal of Property Investment & Finance, vol. 20 no. 1
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 December 1999

Frances Plimmer, W.J. McCluskey and Owen Connellan

The importance of local government within the UK has never been stronger, and this has direct implications as to the most appropriate method of financing this level of…

Abstract

The importance of local government within the UK has never been stronger, and this has direct implications as to the most appropriate method of financing this level of government. The council tax in Great Britain and traditional domestic rates in Northern Ireland represent the two primary sources of local government finance based on domestic property, which currently require significant reform. Weaknesses of the existing systems include the lack of buoyancy due to infrequent revaluations, horizontal and vertical inequities and the need to ensure that domestic property tax systems are seen to be fair. The paper makes a number of important recommendations which would enhance the acceptability and ultimately improve the operation of these forms of ad valorem taxation.

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Property Management, vol. 17 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 March 1998

Owen Connellan and Howard James

This work shows that it is possible to link various economic and property attributes to the value of a commercial property over time in a particular market, and arrive at…

Abstract

This work shows that it is possible to link various economic and property attributes to the value of a commercial property over time in a particular market, and arrive at a valuation pattern which can be used to give a short‐term forecast of valuation fluctuations using longitudinal rather than cross‐sectional analysis. Shows that it is possible to do this by using a novel process we have termed “backtrack valuations” or “backtracking”. The method proposed creates a simulated historic record of valuations, from which a neural network can be trained and then used as a model to estimate a forward trend. This is allied to the requirement in the RICS Appraisal and Valuation Manual (Red Book) whereby the valuer may be instructed to provide Estimated Realisation Price which depends on completion taking place on a future date as compared with Open Market Value where achievement of completion is assumed at the date of valuation. There is also the new definition of “Forecast of Value” in the RICS Red Book and we suggest that the valuer would find the technique of forecasting from backtracked time series of interest and use in both these particular circumstances. The source of data for the investigation was Richard Ellis, International Property Consultants, who provided monthly valuations of 16 major commercial properties in Central London. Our forecasts are presented alongside the subsequent Richard Ellis valuations. The results confirm that in the conditions obtaining in this market, it is feasible to predict capital valuations in the short term. The method is being extended and tested in the wider commercial markets.

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Journal of Property Valuation and Investment, vol. 16 no. 1
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 1 September 1997

David Gerard

Details the creating of a library by Edmund and Ruth Frow. Describes the initial partnership and the gradual transition to a library representing the ideals, trials and…

Abstract

Details the creating of a library by Edmund and Ruth Frow. Describes the initial partnership and the gradual transition to a library representing the ideals, trials and tribulations of ordinary working people. Summarizes the scope of the present collection of over 30,000 items and gives details of a number of rare books and documents.

Details

Library Review, vol. 46 no. 6
Type: Research Article
ISSN: 0024-2535

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