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The complexity of property valuation, coupled with valuers’ cognitive limitations, makes some degree of error inevitable in valuations. However, given the crucial role that valuations play in the efficient functioning of the economy, there is a need for continuous improvement in the reliability of reported values by enhancing the quality of the decision-making process. The purpose of this paper is to review previous research on valuation decision-making, with particular interest in examining the approaches to improving the quality of valuation decisions and identifying potential areas for further research.

The paper adopts a narrative approach to review 42 research articles that were obtained from Scopus and Web of Science databases and through author citation searches.

Our findings show that existing literature is skewed towards examining the use of technology in the form of decision support systems (DSS), with limited research attention on non-technological (i.e. behavioural) approaches to improving the quality of valuation decisions. We summarise the non-technological approaches and note that much of the discussions on these approaches often appear as recommendations arising from other studies rather than original investigations in their own rights.

We conclude that studies investigating the effectiveness of the non-technological approaches to improving valuation decision-making are lacking, providing various avenues for further research.

This paper presents the first attempt to provide a comprehensive overview of non-technological approaches to improving the quality of valuation decisions.

Ordinary direct capitalization is normally considered procyclical in its present form (De Lisle Grissom, 2011); for this reason, an alternative approach to direct capitalization may be useful in the determination of a robust opinion of value. The valuation standards propose an alternative determination of terminal value in the discounted cash flow analysis, recommending that for cyclical assets, the terminal value should consider … “the cyclical nature of the asset and should not be performed in a way that assumes “peak” or “trough” levels of cash flows in perpetuity” (IVS 105 Valuation Approaches and Methods para 50.21 lett e).

The introduction in International Valuation Standards (IVS) of Cyclical Assets raises several questions for the community of real estate professionals and academicians (IVS, 2022, 105 Valuation Approaches and Methods para 50.09 lett d). Cyclical assets can be defined as property whose value is “influenced by upturn and downturn of the market in a significant way” (d’Amato et al., 2019).

The paper proposes different solutions to the problem. The determination of the exit value using cyclical capitalization allows for a prudent assessment of the value and may be used either as a valuation procedure or a risk analysis method.

The valuation comparison with the traditional valuation techniques will be based on an iteration of exit value in order to determine the effects of the valuation procedure on the opinion of value.

The implication of the valuation procedure is the introduction of a countercyclical valuation method to determine the exit value in order to reach stable and reliable valuations for income-producing properties.

These models may have a social implication, providing valuation for income-producing properties that may deal with the property market cycle in a more efficient way, providing efficient valuation for banks and institutions.

The paper is the first application of such a valuation procedure to the determination of exit value.

Surprisingly little is known of the various methods of security analysis used by financial analysts with industry-specific knowledge. Financial analysts’ industry knowledge is a favored and appreciated attribute by fund managers and institutional investors. Understanding analysts’ use of industry-specific valuation models, which are the main value drivers within different industries, will enhance our understanding of important aspects of value creation in these industries. This paper contributes to the broader understanding of how financial analysts in various industries approach valuation, offering insights that can be beneficial to a wide range of stakeholders in the financial market.

This paper systematically reviews existing research to consolidate the current understanding of analysts’ use of valuation models and factors. It aims to demystify what can often be seen as a “black box”, shedding light on the valuation tools employed by financial analysts across diverse industries.

The use of industry-specific valuation models and factors by analysts is a subject of considerable interest to both academics and investors. The predominant model in several industries is P/E, with some exceptions. Notably, EV/EBITDA is favored in the telecom, energy and materials sectors, while the capital goods industry primarily relies on P/CF. In the REITs sector, P/AFFO is the most commonly employed model. In specific sectors like pharmaceuticals, energy and telecom, DCF is utilized. However, theoretical models like RIM and AEG find limited use among analysts.

This is the first paper systematically reviewing the research on analyst’s use of industry-specific stock valuation methods. It serves as a foundation for future research in this field and is likely to be of interest to academics, analysts, fund managers and investors.

Blockchain is an emerging digital technology proposed and trialled among different built environment professions. The technology has been proposed to introduce transparency, security and trust in property transactions. Despite this proposition, few studies have analysed the barriers and prospects in property valuation, especially in markets plagued by low transparency and a lack of stakeholder trust. Using Nigeria as a case study, this study assesses the barriers and prospects for adopting blockchain technology in property valuation.

Data was collected from 180 valuers practising in Nigeria through an online survey, and the data was analysed using mean score ranking and the chi-square (χ²) test of independence.

Firstly, there was a low awareness of the application of blockchain technology and an association between the number of valuation jobs executed annually and awareness of the application of blockchain technology. The most important barriers revolved around the knowledge, technical know-how of blockchain and the cost of implementing such technology. The prospects for blockchain are very high as all identified prospects were considered important, with transparency being the most crucial factor for its adoption, followed by the monitoring activities in real time and the permanence in storing records.

This study's implications lie in the potential benefit of transparency identified for blockchain, which could act as a tool to introduce transparency into valuation industries that battle key issues surrounding transparency and trust. Furthermore, this study can be utilised by policymakers and property industry players in mapping strategies to adopt the beneficial use of blockchain as one among the suite of proptech tools disrupting the property valuation scene, in their practice. This also presents an opportunity to draw upon insights from this study to better prepare for using blockchain in property valuation.

This study appears to be the first to empirically assess barriers and prospects for blockchain in property valuation practice. It contributes to the literature by identifying key factors that will deter and/or promote the application of blockchain, an emerging and disruptive digital technology.

In 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also discuss the intervening developments in scholarly research, standard setting and practice over the past 20+ years to outline the future challenges for research into accounting for intangibles.

We conducted a literature review to identify past developments and link the findings to current accounting standard-setting developments to inform our view of the future.

Current intangibles accounting practices are conservative and unlikely to change. Accounting standard setters are more interested in how companies report and disclose the value of intangibles rather than changing how they are determined. Standard setters are also interested in accounting for new forms of digital assets and reporting economic, social, governance and sustainability issues and how these link to financial outcomes. The IFRS has released complementary sustainability accounting standards for disclosing value creation in response to the latter. Therefore, the topic of intangibles stretches beyond merely how intangibles create value but how they are also part of a firm’s overall risk and value creation profile.

There is much room academically, practically, and from a social perspective to influence the future of accounting for intangibles. Accounting standard setters and alternative standards, such as the Global Reporting Initiative (GRI) and European Union non-financial and sustainability reporting directives, are competing complementary initiatives.

Our results reveal a window of opportunity for accounting scholars to research and influence how intangibles and other non-financial and sustainability accounting will progress based on current developments.

An appraisal is normally conducted to determine financial viability of property development projects for several purposes. The residual valuation method is normally used to appraise such projects and the purpose of the paper is to examine its financial viability decision rules (FVDRs) used by practitioners.

The qualitative research approach was adopted based on the case study strategy of enquiry where 48 development appraisal reports from 37 Royal Institution of Chartered Surveyors registered firms in London were accessed from the internet and critically reviewed.

Site-specific and area-wide development appraisals for planning purposes dominated the reports. Five FVDRs were identified. A development project is financially viable if: (i) computed residual profit expressed as a percentage return is equal to or greater than a determined market benchmark risk-adjusted return; (ii) computed residual profit expressed as a percentage return is positive; (iii) calculated residual land value is greater than open market land value or benchmark land value; (iv) computed residual land value is positive; and (v) there is a surplus when appraisal cost variables including land costs plus allowance for developer’s profit are deducted from gross development value. In some reports, it was discovered some appraisal cost variables were excluded whilst others were inappropriately treated.

The first and third FVDRs are reasonable whilst the remaining are fraught with problems and using them can make development projects that are financially unviable to be viable. Also, excluding relevant cost variables and treating some inappropriately understate the appraisal cost component resulting in incorrect financial viability outcomes. These can lead to wrong recommendations about financial viability being proffered that negatively affect the practitioners’ clientele. The dominance of development appraisals for planning purposes shows the important role development appraisals continue to play in the English planning system.

To the best of the author’s knowledge, it is the first time FVDRs in development appraisals have been systematically investigated in England with resultant new empirical findings and arguments.

This study aims to examine the influence of green feature adoption on building value within Jakarta, Indonesia’s market. It assesses the presence of green premiums or brown discounts through a supply-demand analysis, evaluates their impact on building values, and identifies factors influencing green features’ value reflection and development.

This study employs a qualitative approach to investigate the green feature reflection on building value in Jakarta, Indonesia. Data is gathered through questionnaires and semi-structured interviews with appraisers, the GBCI, and developers.

The study’s findings reveal a positive acceptance of green buildings in Jakarta’s market, with most appraisers recognising a higher perceived value in these sustainable structures. Factors contributing to this higher value perception encompass green building certifications, reduced operational costs, and increased appeal to potential tenants. Conversely, hindering factors include a lack of law enforcement and limited availability of market data.

The study highlights practical considerations for construction and real estate stakeholders on the factors influencing green building development. Supporting factors for green building development include sustainability training, compliance with green building standards, and incentives. Conversely, obstacles encompass enforcement challenges, stakeholder expertise deficits, and resistance to change.

This study is the first in Indonesia, magnifying its significance and potential impact. It pioneers exploring green building features’ influence on building value in Jakarta, presenting a unique contribution to the existing literature. This originality emphasises the imperative for sustainable development in the region and sets the stage for future research and policy initiatives.

This paper studies diversification and value in the investment portfolios of (non-listed) Real Estate Investment Funds (REIFs) exploring how the value of diversification is captured by the market and by investors (beyond reported valuations).

We apply the Herfindahl-Hirschman Index (HHI) to study the level of concentration versus diversification in the investment portfolios of REIFs (both in terms of segment and geographical diversification). We use a dataset from INREV with data from 62 investment portfolios, with an average of 86 REIFs per portfolio for the period of 2008–2020 (to study segment diversification). We use a second dataset from INREV with data from 30 investment portfolios with an average of 79 REIFs per portfolio for the period of 2005–2020 (to study geographical diversification). We employ a cluster analysis approach to identify common features among the investment funds.

We conclude that (segment diversified) portfolios with higher degrees of leverage exhibit higher income yields, albeit diversification is captured indirectly through asset choices – more diversified portfolios tend to exhibit a stronger risk and return relationship. Also, geographical diversification creates value (more significantly by for the correct combination of countries carefully choosing what different geographies to group in the diversified portfolio).

One limitation of our study is that our portfolios are funds of funds, since the available data could not reach the asset detail, but we believe this does not compromise our results.

Diversification leads to higher risk-adjusted returns which suggests that properties may be undervalued (market value) in the framework of the Gordon Model, contrary to expectations (regarding investment value).

Investors capture the value of diversification differently, suggesting a gap between market value and investment value that can be explored.

This paper aims to develop a framework for the bioaccounting measurement of environmental assets based on natural wealth sustainability. Specifically, this paper proposes a theoretical structure for qualitative and quantitative organization-level assessments of the existence and circulation of water, air, wildlife, flora, soil and subsoil resources.

This research used an inductive method with a qualitative and quantitative approach. The authors postulate a systemic and comprehensive bioaccounting measurement of environmental assets, including heterogeneous and homogeneous methods and quantitative and qualitative valuations of the resources that comprise environmental assets.

The authors describe a theoretical structure for the bioaccounting measurement of environmental assets based on the sustainability of natural wealth through heterogeneous and homogeneous measurement methods and show how to integrate these assets through an homogeneous method.

The development of this general theoretical structure will require the integration of theoretical, conceptual and technical developments from multiple disciplines. The authors hope that the scientific community will evaluate and study this proposal for faster progress towards its practical implementation in organizations.

The authors structured the bioaccounting measurements, which are presented individually for each class of environmental assets. Each of these assets requires subcategories (accounts, subaccounts and resources) and recognition/measurement units. Environmental value units (EVUs) are used to standardize the plurality of measurement units.

Income from investment properties can fluctuate depending on the state of the economy. The idea that there is always a potential exit (sale) value whenever the property stops performing at its optimum or deflation in the economy will always appeal to investors. To determine housing prices, investors would rely on a direct comparison approach (DCA) of recent substitute sales in the open market. Appraisers use this approach to develop an opinion of value when there is a plethora of recent sales to analyse.

The study was designed to establish the use of the analytical hierarchy process (AHP) approach as a support tool for deciding property appraisals. A case study of an industrial single-storey stand-alone building with grade-level parking in the south-east of Calgary, Canada, was investigated with the AHP approach. The result was cross-referenced with the DCA.

Using a consistency index of 0.077321 and a consistency ratio of 0.085912, the matrix multiplication was determined to be 0.456706. The average valuations derived from the adjusted price per square foot using the direct comparison method and the unadjusted price per square foot using the AHP were deemed the best value estimate in the light of available comparables. The implications of the findings suggest that AHP, as a quantitative technique, can support and validate the use of similar non-recent sale comparables when appraising investment properties with the DCA.

AHP is an alternative aid in quantitatively deciding the most significant value attribute for comparison before subjective adjustments. When intuitively applied in the DCA, these subjective adjustments almost always lead to an overvaluation of properties.