Basel III Definition of Long-term Value
10.6 Investment Value
10.7 Illustration of the Three Established Approaches
10.8 Performance of the Three Valuation Bases over the Last Two Property Market Downturns in the UK
10.9 Summary and Conclusions
16 Bibliography
17 Index
List of Tables
1 Chapter 1Table 1.1 Weighted average absolute differences between valuations and prices...Table 1.2 Weighted average differences between valuations and prices 2000 to ...
2 Chapter 2Table 2.1 Cash flow for a fixed-interest bond.Table 2.2 Cash flow for an index-linked bond.Table 2.3 Total returns from mainstream asset classes in the UK, 1981–2018.Table 2.4 Geared and ungeared returns.Table 2.5 A real and nominal risk hierarchy.Table 2.6 Projected cash flow for investment ATable 2.7 Projected cash flow for investment B
3 Chapter 3Table 3.1 Typical information requirements for discounted cash flow (DCF) app...Table 3.2 Influences on capitalisation rate and target rate selection.Table 3.3 Cash flow for Example 3.1.Table 3.4 Resale price and NPV calculations.Table 3.5 Refurbishment, resale price and NPV calculations.Table 3.6 Cash flow for Example 3.3.Table 3.7 Resale price, PV and investment value calculations.Table 3.8 Cash flow for Example 3.4.Table 3.9 Interest-only loan and associated investor cash flow.Table 3.10 Amortised loan and associated investor cash flow.
4 Chapter 4Table 4.1 Nottingham city centre retail property rents, yields and inflation ...Table 4.2 Fully let freehold cash flow.Table 4.3 Reversionary cash flow.
5 Chapter 6Table 6.1 Indexed lease cashflow.Table 6.2 DCF and arbitrage valuation, indexed and stepped leases.Table 6.3 Cashflow, Example 6.9, target rate 7.75%.Table 6.4 Cashflow, Example 6.9, target rate 15%.Table 6.5 Unexpired term (in years) at which the highest target rate does not...Table 6.6 Explicit-DCF net-of-tax valuation.
6 Chapter 7Table 7.1 Capitalisation rates for terminable incomes.Table 7.2 Performance of comparable and subject at different rental growth r...Table 7.3 Leasehold valuations based upon ranges of freehold and leasehold r...
7 Chapter 8Table 8.1 Risk-adjusted cash flow discounted at the risk-free rate
8 Chapter 9Table 9.1 Example 9.1 Table of inputs.Table 9.2 Example 9.1 : Basic residual valuation.Table 9.3 Example 9.1 Discounted cash flow based on Wyatt (2013, pp. 409–411)...Table 9.4 Analysis of developer returns – inputs.Table 9.5 Variation in developer's profit given a fixed IRR of 20%.Table 9.6 Hypothetical residual land values with different levels of growth i...Table 9.7 Example 9.1 - Treatment of finance within the cash flow.
List of Illustrations
1 Chapter 1Figure 1.1 UK valuation accuracy and bias (value weighted figures): 1983 to...Figure 1.2 Volatility of valuation and transaction-based series (SD % pq): ...
2 Chapter 2Figure 2.1 Profile of property investment values through time – freehold.Figure 2.2 Profile of property investment values through time – leasehold.Figure 2.3 The risk–return trade-off.Figure 2.4 Risk and return in a two-asset portfolio.Figure 2.5 Multi-asset portfolio efficient frontiers.Figure 2.6 The efficient frontier with a risk-free asset.
3 Chapter 4Figure 4.1 UK all property monthly equivalent yields and UK 10-year governme...Figure 4.2 Reversionary income profile.Figure 4.3 UK rental value change June 1977 to March 2018 (% per quarter)....Figure 4.4 Over-rented property income profile.Figure 4.5 Double counting in over-rented property valuation.
4 Chapter 5Figure 5.1 Nominal and real rents.Figure 5.2 Capital values in real terms.
5 Chapter 6Figure 6.1 Over-rented income profile assuming a breakthrough between first ...Figure 6.2 Over-rented income profile assuming no breakthrough before last r...
6 Chapter 7Figure 7.1 Fixed profit rent income profile.Figure 7.2 Geared profit rent growth income profile.Figure 7.3 Unsynchronised reviews – income profile.
7 Chapter 8Figure 8.1 NPV and IRR simulation results.Figure 8.2 Simulation inputs and distributions.
8 Chapter 9Figure 9.1 Treatment of time in a simple residual development valuation.Figure 9.2 Mean, median and standard deviation of development and investment...
9 Chapter 10Figure 10.1 A stylised view of the Market Value and Mortgage Lending Value b...Figure 10.2 A stylised view of the three different concepts of value for ban...Figure 10.3 All property UK Market Values 1982–2015. Compiled by authors fro...Figure 10.4 Differences between Market Value and MLV/IV 1982–2015. Compiled ...Figure 10.5 UK capitalisation rates and rental growth forecasts between 1982...
Guide
1 Cover
2 Table of Contents
Pages
1 iii
2 iv
3 xi
4
