La dimensión de la subjetividad en la formación del valor inmobiliario : aplicación del método de análisis de ecuaciones estructurales al mercado residencial de Lisboa

The discretionality and the appraisers’ subjectivity that characterize traditional real estate valuation are still allowed to take part in the formation of the asset price even when respecting international standards (EVS, IVS) or Appraisal Institution´s regulations (TEGOVA, RICS, etc.). The application of econometric and statistical methods to real estate valuation aims at the elimination of subjectivity on the appraisal process. But the unanswered question underneath this subject is the following: How important is the subjective component on real estate appraisal value formation? On this study Structural Equation Models (SEM) are used to determine the importance of the objective and subjective components on real estate valuation value formation as well as the weight of economic factors and the current economic context on real estate appraisal for mortgage purposes price formation. There were used two latent variables, Objective Component and Subjective Component, witch aggregate objective observed variables and subjective observed and unobserved variables, respectively. Factorial Exploratory Analysis is the statistical technique used in order to link the observed variables extracted from the valuation appraisal reports to the latent constructs derived from the theoretical model. SEM models were used to refine the model, eliminate non‐significant variables and to determine the weight of Objective and Subjective latent variables. These techniques were applied to a sample of over 11.000 real estate assets appraisal reports throughout the time period between November of 2006 and April of 2012. The real assets used on this study are located on Lisbon’s Metropolitan Area – “Grande Lisboa” –, Portugal. From this study, we conclude that Subjective Component has a considerable weight on real estate appraisal value formation and that the external factor Economic Situation has a very small impact on real estate appraisal value formation.

Desarrollo de un modelo de predimensionado de costes de construcción en el proyecto arquitectónico

El objetivo de la presente investigación es el desarrollo de un modelo de cálculo rápido, eficiente y preciso, para la estimación de los costes finales de construcción, en las fases preliminares del proyecto arquitectónico. Se trata de una herramienta a utilizar durante el proceso de elaboración de estudios previos, anteproyecto y proyecto básico, no siendo por tanto preciso para calcular el “predimensionado de costes” disponer de la total definición grafica y literal del proyecto. Se parte de la hipótesis de que en la aplicación práctica del modelo no se producirán desviaciones superiores al 10 % sobre el coste final de la obra proyectada. Para ello se formulan en el modelo de predimensionado cinco niveles de estimación de costes, de menor a mayor definición conceptual y gráfica del proyecto arquitectónico. Los cinco niveles de cálculo son: dos que toman como referencia los valores “exógenos” de venta de las viviendas (promoción inicial y promoción básica) y tres basados en cálculos de costes “endógenos” de la obra proyectada (estudios previos, anteproyecto y proyecto básico). El primer nivel de estimación de carácter “exógeno” (nivel .1), se calcula en base a la valoración de mercado de la promoción inmobiliaria y a su porcentaje de repercusión de suelo sobre el valor de venta de las viviendas. El quinto nivel de valoración, también de carácter “exógeno” (nivel .5), se calcula a partir del contraste entre el valor externo básico de mercado, los costes de construcción y los gastos de promoción estimados de la obra proyectada. Este contraste entre la “repercusión del coste de construcción” y el valor de mercado, supone una innovación respecto a los modelos de predimensionado de costes existentes, como proceso metodológico de verificación y validación extrínseca, de la precisión y validez de las estimaciones resultantes de la aplicación práctica del modelo, que se denomina Pcr.5n (Predimensionado costes de referencia con .5niveles de cálculo según fase de definición proyectual / ideación arquitectónica). Los otros tres niveles de predimensionado de costes de construcción “endógenos”, se estiman mediante cálculos analíticos internos por unidades de obra y cálculos sintéticos por sistemas constructivos y espacios funcionales, lo que se lleva a cabo en las etapas iniciales del proyecto correspondientes a estudios previos (nivel .2), anteproyecto (nivel .3) y proyecto básico (nivel .4). Estos cálculos teóricos internos son finalmente evaluados y validados mediante la aplicación práctica del modelo en obras de edificación residencial, de las que se conocen sus costes reales de liquidación final de obra. Según va evolucionando y se incrementa el nivel de definición y desarrollo del proyecto, desde los estudios previos hasta el proyecto básico, el cálculo se va perfeccionando en su nivel de eficiencia y precisión de la estimación, según la metodología aplicada: [aproximaciones sucesivas en intervalos finitos], siendo la hipótesis básica como anteriormente se ha avanzado, lograr una desviación máxima de una décima parte en el cálculo estimativo del predimensionado del coste real de obra. El cálculo del coste de ejecución material de la obra, se desarrolla en base a parámetros cúbicos funcionales “tridimensionales” del espacio proyectado y parámetros métricos constructivos “bidimensionales” de la envolvente exterior de cubierta/fachada y de la huella del edificio sobre el terreno. Los costes funcionales y constructivos se ponderan en cada fase del proceso de cálculo con sus parámetros “temáticos/específicos” de gestión (Pg), proyecto (Pp) y ejecución (Pe) de la concreta obra presupuestada, para finalmente estimar el coste de construcción por contrata, como resultado de incrementar al coste de ejecución material el porcentaje correspondiente al parámetro temático/especifico de la obra proyectada. El modelo de predimensionado de costes de construcción Pcr.5n, será una herramienta de gran interés y utilidad en el ámbito profesional, para la estimación del coste correspondiente al Proyecto Básico previsto en el marco técnico y legal de aplicación. Según el Anejo I del Código Técnico de la Edificación (CTE), es de obligado cumplimiento que el proyecto básico contenga una “Valoración aproximada de la ejecución material de la obra proyectada por capítulos”, es decir , que el Proyecto Básico ha de contener al menos un “presupuesto aproximado”, por capítulos, oficios ó tecnologías. El referido cálculo aproximado del presupuesto en el Proyecto Básico, necesariamente se ha de realizar mediante la técnica del predimensionado de costes, dado que en esta fase del proyecto arquitectónico aún no se dispone de cálculos de estructura, planos de acondicionamiento e instalaciones, ni de la resolución constructiva de la envolvente, por cuanto no se han desarrollado las especificaciones propias del posterior proyecto de ejecución. Esta estimación aproximada del coste de la obra, es sencilla de calcular mediante la aplicación práctica del modelo desarrollado, y ello tanto para estudiantes como para profesionales del sector de la construcción. Como se contiene y justifica en el presente trabajo, la aplicación práctica del modelo para el cálculo de costes en las fases preliminares del proyecto, es rápida y certera, siendo de sencilla aplicación tanto en vivienda unifamiliar (aisladas y pareadas), como en viviendas colectivas (bloques y manzanas). También, el modelo es de aplicación en el ámbito de la valoración inmobiliaria, tasaciones, análisis de viabilidad económica de promociones inmobiliarias, estimación de costes de obras terminadas y en general, cuando no se dispone del proyecto de ejecución y sea preciso calcular los costes de construcción de las obras proyectadas. Además, el modelo puede ser de aplicación para el chequeo de presupuestos calculados por el método analítico tradicional (estado de mediciones pormenorizadas por sus precios unitarios y costes descompuestos), tanto en obras de iniciativa privada como en obras promovidas por las Administraciones Públicas. Por último, como líneas abiertas a futuras investigaciones, el modelo de “predimensionado costes de referencia 5 niveles de cálculo”, se podría adaptar y aplicar para otros usos y tipologías diferentes a la residencial, como edificios de equipamientos y dotaciones públicas, valoración de edificios históricos, obras de urbanización interior y exterior de parcela, proyectos de parques y jardines, etc….. Estas lineas de investigación suponen trabajos paralelos al aquí desarrollado, y que a modo de avance parcial se recogen en las comunicaciones presentadas en los Congresos internacionales Scieconf/Junio 2013, Rics‐Cobra/Septiembre 2013 y en el IV Congreso nacional de patología en la edificación‐Ucam/Abril 2014. ABSTRACT The aim of this research is to develop a fast, efficient and accurate calculation model to estimate the final costs of construction, during the preliminary stages of the architectural project. It is a tool to be used during the preliminary study process, drafting and basic project. It is not therefore necessary to have the exact, graphic definition of the project in order to be able to calculate the cost‐scaling. It is assumed that no deviation 10% higher than the final cost of the projected work will occur during the implementation. To that purpose five levels of cost estimation are formulated in the scaling model, from a lower to a higher conceptual and graphic definition of the architectural project. The five calculation levels are: two that take as point of reference the ”exogenous” values of house sales (initial development and basic development), and three based on calculation of endogenous costs (preliminary study, drafting and basic project). The first ”exogenous” estimation level (level.1) is calculated over the market valuation of real estate development and the proportion the cost of land has over the value of the houses. The fifth level of valuation, also an ”exogenous” one (level.5) is calculated from the contrast between the basic external market value, the construction costs, and the estimated development costs of the projected work. This contrast between the ”repercussions of construction costs” and the market value is an innovation regarding the existing cost‐scaling models, as a methodological process of extrinsic verification and validation, of the accuracy and validity of the estimations obtained from the implementation of the model, which is called Pcr.5n (reference cost‐scaling with .5calculation levels according to the stage of project definition/ architectural conceptualization) The other three levels of “endogenous” construction cost‐scaling are estimated from internal analytical calculations by project units and synthetic calculations by construction systems and functional spaces. This is performed during the initial stages of the project corresponding to preliminary study process (level.2), drafting (level.3) and basic project (level.4). These theoretical internal calculations are finally evaluated and validated via implementation of the model in residential buildings, whose real costs on final payment of the works are known. As the level of definition and development of the project evolves, from preliminary study to basic project, the calculation improves in its level of efficiency and estimation accuracy, following the applied methodology: [successive approximations at finite intervals]. The basic hypothesis as above has been made, achieving a maximum deviation of one tenth, in the estimated calculation of the true cost of predimensioning work. The cost calculation for material execution of the works is developed from functional “three‐dimensional” cubic parameters for the planned space and constructive “two dimensional” metric parameters for the surface that envelopes around the facade and the building’s footprint on the plot. The functional and building costs are analyzed at every stage of the process of calculation with “thematic/specific” parameters of management (Pg), project (Pp) and execution (Pe) of the estimated work in question, and finally the cost of contractual construction is estimated, as a consequence of increasing the cost of material execution with the percentage pertaining to the thematic/specific parameter of the projected work. The construction cost‐scaling Pcr.5n model will be a useful tool of great interest in the professional field to estimate the cost of the Basic Project as prescribed in the technical and legal framework of application. According to the appendix of the Technical Building Code (CTE), it is compulsory that the basic project contains an “approximate valuation of the material execution of the work, projected by chapters”, that is, that the basic project must contain at least an “approximate estimate” by chapter, trade or technology. This approximate estimate in the Basic Project is to be performed through the cost‐scaling technique, given that structural calculations, reconditioning plans and definitive contruction details of the envelope are still not available at this stage of the architectural project, insofar as specifications pertaining to the later project have not yet been developed. This approximate estimate of the cost of the works is easy to calculate through the implementation of the given model, both for students and professionals of the building sector. As explained and justified in this work, the implementation of the model for cost‐scaling during the preliminary stage is fast and accurate, as well as easy to apply both in single‐family houses (detached and semi‐detached) and collective housing (blocks). The model can also be applied in the field of the real‐estate valuation, official appraisal, analysis of the economic viability of real estate developments, estimate of the cost of finished projects and, generally, when an implementation project is not available and it is necessary to calculate the building costs of the projected works. The model can also be applied to check estimates calculated by the traditional analytical method (state of measurements broken down into price per unit cost details), both in private works and those promoted by Public Authorities. Finally, as potential lines for future research, the “five levels of calculation cost‐scaling model”, could be adapted and applied to purposes and typologies other than the residential one, such as service buildings and public facilities, valuation of historical buildings, interior and exterior development works, park and garden planning, etc… These lines of investigation are parallel to this one and, by way of a preview, can be found in the dissertations given in the International Congresses Scieconf/June 2013, Rics‐Cobra/September 2013 and in the IV Congress on building pathology ‐Ucam/April 2014.

Vazios urbanos e a dinâmica imobiliária na produção do espaço em Natal

In Brazil, the discussion about the urban voids appear related to the capitalist urban expansion process, when the urban growth act the cities were expanding toward the periphery, leaving in the interstices vacant land, kept out of the market waiting for the real estate valuation. In Natal, the formation of voids was triggered by the process of fragmentation of space promoted mainly by the urban sprawl with the emergence of new neighborhoods, lots of openings, housing developments and the emergence of new lines of commercial centrality. In this sense, this study aims to understand the role played by urban voids in the real estate dynamics and the production process of the Natal city space. For this, it was adressed the concept building on the conception of different authors and were characterized four types of gaps that best explained the phenomenon in the context of the work proposal addressed, such as idle, empty expectant, empty-brownfield areas and institutional areas. For each of these events were considered an example in the general context of the city through semi-structured interviews with technicians, managers and public officials in promoting the city and /or related to management of urban voids.

A Valuation of SAREB, the Spanish “Bad Bank”, Upside Using the Real Options Methodology

This paper develops a model to analyze the upside potential of profitability of the SAREB (“Asset Management Company for Assets Arising from Bank Restructuring”), the Spanish “Bad Bank”. The model is based in the Real Options methodology, that is especially adequate due to the convergence of two elements, (i) depreciated assets with a high upside potential, and (ii) a highly volatile market as it has shown to be the real estate Spanish market. Our results suggest that the SAREB has a higher than expected profitability potentialthat would be dedicated to increase the return to its shareholders, mainly private banks. Consequently we also show that after the financial crisis are emerging two types of banks in Spain, in one hand the losers who are transferring their real estate assets at a deep discount, and in the other hand the winners, capturing the upside potential of those assets as shareholders of SAREB, and consequently consolidating their strength in the Spanish Real Estate Industry. It is worth to mention that Governments should make an effort in properly redistribute the wealth generated by the real Estate industry.

German open ended funds: was there a valuation problem?

In late 2005, a number of German open ended funds suffered significant withdrawals by unit holders. The crisis was precipitated by a long term bear market in German property investment and the fact that these funds offered short term liquidity to unit holders but had low levels of liquidity in the fund. A more controversial suggestion was that the crisis was exacerbated by a perception that the valuations of the fund were too infrequent and inaccurate. As units are priced by reference to these valuations with no secondary market, the valuation process is central to the process. There is no direct evidence that these funds were over-valued but there is circumstantial evidence and this paper examines the indirect evidence of the process to see whether the hypothesis that valuation is an issue for the German funds holds any credibility. It also discusses whether there is a wider issue for other funds of this nature or whether it is a parochial problem confined to Germany. The conclusions are that there is reason to believe that German valuation processes make over-valuation in a recession more likely than in other countries and that more direct research into the German valuation system is required to identify the issues which need to be addressed to make the valuation system more trusted.

The uncertainty of valuation

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the valuation. The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) is considering ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation, but as yet no definitive view has been taken apart from a single Guidance Note (GN5, RICS 2003) stressing the importance of recognising uncertainty in valuation but not proffering any particular solution. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based, yet uncertainty is probability driven. In this paper, we discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model.

Private property vehicles: the valuation of interests in limited partnerships

This paper examines the extent to which the valuation of partial interests in private property vehicles should be closely aligned to the valuation of the underlying assets. A sample of vehicle managers and investors replied to a questionnaire on the qualities of private property vehicles relative to direct property investment. Applying the Analytic Hierarchy Process (AHP) technique the relative importance of the various advantages and disadvantages of investment in private property vehicles relative to acquisition of the underlying assets are assessed. The results suggest that the main drivers of the growth of the this sector have been the ability for certain categories of investor to acquire interests in assets that are normally inaccessible due to the amount of specific risk. Additionally, investors have been attracted by the ability to ‘outsource’ asset management in a manner that minimises perceived agency problems. It is concluded that deviations from NAV should be expected given that investment in private property vehicles differs from investment in the underlying assets in terms of liquidity, management structures, lot size, financial structure inter alia. However, reliably appraising the pricing implications of these variations is likely to be extremely difficult due to the lack of secondary market trading and vehicle heterogeneity.

Valuation accuracy: reconciling the timing of the valuation and sale

Carsberg (2002) suggested that the periodic valuation accuracy studies undertaken by, amongst others, IPD/Drivers Jonas (2003) should be undertaken every year and be sponsored by the RICS, which acts as the self-regulating body for valuations in the UK. This paper does not address the wider issues concerning the nature of properties which are sold and whether the sale prices are influenced by prior valuations, but considers solely the technical issues concerning the timing of the valuation and sales data. This study uses valuations and sales data from the Investment Property Databank UK Monthly Index to attempt to identify the date that sale data is divulged to valuers. This information will inform accuracy studies that use a cut-off date as to the closeness of valuations to sales completion date as a yardstick for excluding data from the analysis. It will also, assuming valuers are informed quickly of any agreed sales, help to determine the actual sale agreed date rather than the completion date, which includes a period of due diligence between when the sale is agreed and its completion. Valuations should be updated to this date, rather than the formal completion date, if a reliable measure of valuation accuracy is to be determined. An accuracy study is then undertaken using a variety of updating periods and the differences between the results are examined. The paper concludes that the sale only becomes known to valuers in the month prior to the sale taking place and that this assumes either that sales due diligence procedures are shortening or valuers are not told quickly of agreed sale prices. Studies that adopt a four-month cut-off date for any valuations compared to sales completion dates are over cautious, and this could be reduced to two months without compromising the data.

Benchmarking and valuation issues in measuring depreciation for European office markets

Purpose – The paper addresses the practical problems which emerge when attempting to apply longitudinal approaches to the assessment of property depreciation using valuation-based data. These problems relate to inconsistent valuation regimes and the difficulties in finding appropriate benchmarks. Design/methodology/approach – The paper adopts a case study of seven major office locations around Europe and attempts to determine ten-year rental value depreciation rates based on a longitudinal approach using IPD, CBRE and BNP Paribas datasets. Findings – The depreciation rates range from a 5 per cent PA depreciation rate in Frankfurt to a 2 per cent appreciation rate in Stockholm. The results are discussed in the context of the difficulties in applying this method with inconsistent data. Research limitations/implications – The paper has methodological implications for measuring property investment depreciation and provides an example of the problems in adopting theoretically sound approaches with inconsistent information. Practical implications – Valuations play an important role in performance measurement and cross border investment decision making and, therefore, knowledge of inconsistency of valuation practice aids decision making and informs any application of valuation-based data in the attainment of depreciation rates. Originality/value – The paper provides new insights into the use of property market valuation data in a cross-border context, insights that previously had been anecdotal and unproven in nature.

The uncertainty of valuation

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the valuation. The degree of the uncertainties will vary according to the level of market activity; the more active a market, the more credence will be given to the input information. In the UK at the moment the Royal Institution of Chartered Surveyors (RICS) is considering ways in which the uncertainty of the output figure, the valuation, can be conveyed to the use of the valuation, but as yet no definitive view has been taken. One of the major problems is that Valuation models (in the UK) are based upon comparable information and rely upon single inputs. They are not probability based, yet uncertainty is probability driven. In this paper, we discuss the issues underlying uncertainty in valuations and suggest a probability-based model (using Crystal Ball) to address the shortcomings of the current model.

Sustainable Planning And Land Valuation, New Forms Of Suburban Growth In Areas Of The Spanish Mediterranean Coast

The present study analyzes residential models in coastal areas with large influxes of tourism, the sustainability of their planning and its repercussion on urban values. The project seeks to establish a methodology for territorial valuation through the analysis of externalities that have influenced urban growth and its impact on the formation of residential real estate values. This will make it possible to create a map for qualitative land valuation, resulting from a combination of environmental, landscape, social and productive valuations. This in turn will establish a reference value for each of the areas in question, as well as their spatial interrelations. These values become guidelines for the study of different territorial scenarios, which help improve the sustainable territorial planning process. This is a rating scale for urban planning. The results allow us to establish how the specific characteristics of the coast are valued and how they can be incorporated into sustainable development policies.

A geometriai Brown-mozgás feltevésének elfogadhatósága a reálopciók értékelésében (The acceptability of the assumption of geometric brownian motion in the valuation of real options)

A reálopciók a döntési rugalmasság megtestesítőiként jelen vannak a vállalatvezetők mindennapjaiban, és cégtől függően jelentős értéket képviselhetnek. Értékelésük a hagyományos diszkontált pénzáramlás módszerekkel csak korlátozottan lehetséges, ezért alternatívaként felmerül a pénzügyi opcióárazás módszertana, amelynek hagyományos változatai az alaptermék alakulásáról geometriai Brown-mozgást feltételeznek. A cikk ezt a feltevést veszi górcső alá a reálopciókra történő alkalmazás szempontjából, és megmutatja, hogy habár önkényesnek tűnhet, valójában nem pusztán egy matematikai szempontból kényelmes megoldás, hanem pénzügyileg is elfogadható feltétel. _______ Real options represent the fl exibility of decision-making, and are thus part of the everyday work of corporate executives, often having great value. Valuing them with the use of traditional Discounted Cash Flow models has limited relevance, therefore arises the alternative methodology of fi nancial option pricing, the traditional versions of which assume that the price of the underlying asset follows Geometric Brownian Motion. The paper examines this assumption from the aspect of real option valuation and shows that although it might seem arbitrary, it is not only a mathematically convenient choice, but also a fi nancially acceptable one.

Maximum Justifiable Investment Analysis Determines Property Valuation

Investors and developers are often faced with the task of determining the worth or value of a real estate entity that presently exists or is proposed for development. This article explains the process for determining the value of a proposed project and, subsequently, the maximum investment dollars the project can cover, while at the same time producing a reasonable return for the investor. A proposed 300-room hotel serves as the real estate entity to be analyzed.