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Real Value Valuation for Property in the 21 Century? – A Comparison of Conventional and Real Value Models

Author/s: Rodney Jefferies

Date Published: 1/01/2010

Published in: Volume 16 - 2010 Issue 4 (pages 435 - 457)

Abstract

An old idea transforms into a simplified dynamic application for valuing investment property in the 21st Century. This paper presents a new all risks real yield (ARRY) valuation model for the 21st Century valuer’s use. It requires a paradigm shift in the minds of valuers from 20th Century thinking in nominal value terms to thinking in real value terms. This affects the methodology, valuation models and techniques required to value income producing property. It is compared to and distinguished from the conventional all risks yield (ARY) model used in the UK and previous real value valuation models developed in the UK and USA in the 1970-80’s. This ARRY model is an advance on generic real value valuation models of the 1990’s. A sales analysis and common valuation examples compare the ARRY model with conventional valuation methodology.

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Keywords

All Risks Real Yield - Conventional and Traditional Valuation Theory - Discounted Cash Flow - Dynamic Capitalisation - Income Valuation Models - Investment Real Estate - Real Value Valuation

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