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Examines the underlying basis of the valuation process at a time when the world property markets are experiencing the effects of the global recession. Refers to professional criticism in the USA, the UK and Australasia. Advocates a return to first principles in all appraisals and valuations, the value being determined between the supply and demand criteria in any particular market.

A development project is characterised by many periods of negative cash flows followed by a relatively smaller number of cash surplus periods. Thus, because of the time value of money, a major risk in real estate development arises from events which extend the periods between the negative and positive cash flows. This paper reviews the traditional methods of evaluating development projects in this context and suggests that more detailed cash flow techniques should be adopted to allow greater flexibility in appraisals, thus accounting for changes in circumstances through sensitivity and scenario analysis. However, even where such techniques are used, developments should not be viewed in isolation and consideration must also be given to the feasibility of a scheme in a corporate framework.

Details how procedures for carrying out valuations for rent review purposes are re‐cast in a contemporary approach. Pays special attention to market structure, data compatibility and the effect of market distortions. Provides a detailed analysis of an Australian case which discloses illogicalities in valuation theory and practice in the tradition of the English case – Segama NV v Penny Le Roy Ltd.

It is important to remain creative when conducting segmentation research, as many different ways to segment a market can exist. Five main bases are discussed: geographic, demographic, psychographic, behaviouristic and image. This is followed by an overview of the main techniques used to establish and verify segments, including automatic interaction detector, conjoint analysis, multidimensional scaling and canonical analysis.

Discusses the methods of sensitivity analysis in use generally and by the property appraisal profession. Proposes a simplified structured and systematic technique of selecting critical or sensitive factors for sensitivity analysis in property development and investment appraisal. Concludes that sensitivity analysis has become an integral part of property appraisal.

Investigates and evaluates land use data and valuation in Sydney′s central area. Proposes that, in order to make informed investment decisions, there should be an understanding of the nature and functioning of the physical environment in which funds are to be committed. Investigates what things belong in an urban area. Concludes with data related to how land is used. States that lowest land value and floor level classes tend to be allocated to goods handling and destinations for mass gatherings of people; highest land value and floor‐level are allocated to business categories.

Determines that factor analysis is a data reduction technique, which takes a number of different variables and tries to note any underlying relationships which may be present. Posits that the factor analysis technique was originally pioneered by a psychologist named Spearman to aid his understanding of human abilities, he postulated that a basic factor of intelligence underlies each person's ability to perform various skills. Adumbrates that the applications of factor analysis in marketing are in two main categories, to: attempt to understand behavioural processes by trying to identify and give descriptive definitions to underlying factors; reduce large groups of descriptive variables into a smaller but more manageable representative subset. Closes by giving a table, with sorted rotated factor loadings which are useful in naming factors, from the pharmaceutical industry. Concludes that factor analysis is useful when the researcher is primarily concerned with degree of association among variables.

Much has been written about probabilistic methods of risk analysis and about the probability distributions required for its use. This paper demonstrates a method known as the probability of acceptance error approach using simple scenarios in which the only variable tested by a probability distribution is rental growth but in which other variables such as discount rate, capitalisation rate and holding period are also tested. In particular, the sensitivity of the probability distribution chosen for the rental growth values is discussed where both the rental growth values themselves and the probability distributions are normally distributed and also where they have a skewed distribution. It is shown that for current market projections for rental growth great accuracy in the selection of a probability distribution is not required. It is also shown that assumptions about independence or serial correlation of cash flows may be similarly treated and that the probability of acceptance error may be described as a range having independence and serial correlation as the two extremes. The range usually turns out to be fairly narrow. The most sensitive item in the calculations is, as expected, the discount rate. The above findings are demonstrated in a series of appendices.

Many taxing authorities use unimproved land (site) values as a tax base. In highly developed urban areas this may require the use of indirect valuation methods, such as an extraction technique to arrive at the land value. The purpose of this paper is to propose that the land extraction (residual) valuation calculation of an investment property should incorporate productivity variables, rather than cost based figures, in order to simulate market value principles.

This paper examines the assessment of the land component of investment property as an ad valorem tax base. It justifies a valuation methodology using the market comparison approach before developing a model to meet specified criteria. The model incorporates productivity based benchmarks and differentials appropriate for shopping centre properties. The model is then tested on an Australian shopping centre.

This paper found that the land value component of a major shopping centre in Australia could be derived from comparable vacant and improved sales using the variables of moving annual turnover (MAT) and gross lettable area (GLA) as key value determinants.

This exploratory research identified a model that is appropriate for major shopping centres in Queensland, Australia. The model could form the framework for other types of investment property but the key productivity determinants would require re‐examination.

This study provides a practical solution to an ongoing valuation problem arising from the rating legislation in Australia, which requires the determination of site value for all property types.

This paper uses productivity variables to assess the site value of investment property. This innovative methodology can provide a more accurate appraisal of site values.

A weakness in most discussions about definitions of market value is that no explicit criteria for judging whether a definition is good or bad are presented. In this article three criteria are analysed: the definition should have a clear meaning, the definition should be such that it is possible to know, at least approximately, what the market value is, and finally that the definition should lead to a concept that is relevant for actors on the market. These three criteria are then used to analyse three questions: “Should the definition include a reference to prudent and knowledgeable actors?”, “Should the definition refer to willing buyers and sellers?” and finally, “How shall we interpret the concept of expected or probable price?” The answer to the first and second question is no. The answer to the third question is that a frequency interpretation of probability should be rejected in valuation contexts, in favour of an interpretation where probability is identified with a rationally justified degree of confidence.