At GMR & Co we have extensive experience of carrying out Property Investment Valuations and Land Valuations for our clients in Qatar, UAE and across the world. With decades of experience in living and working in the middle east we understand the region better than any other asset valuation partner.

What are property investment valuations?

Property Investment valuations ensure that the investor and vendor obtain the correct value for the assets in question, be that land, machinery, or other specialist assets – we help ensure that you don’t sell for too little or buy for too much. We call this the Investment value which is the amount of money an investor would pay for property. It refers to an asset’s specific value based on certain parameters. We have extensive experience of working with businesses on property & land valuation in Dubai, Qatar, UAE and across the world.

Potential investors often adopt an investment value metric when they decide to invest in property (buildings or land) with certain personal investment goals in mind. It can include a certain Return on Investment rate (ROI) that they are looking for in an investment.

Importance of investment value

An investment value is important to potential buyers of a property is that they want to compare the price of the real estate to the anticipated ROI. When they find the specific rate of return, they can measure the investment’s final results with the projected price they will pay for the property. It allows the investor to make intelligent purchasing decisions that are in line with their investment objectives.

Investment Value vs. Market Value

While investment value measures the potential value of an investment based on certain conditions, market value measures the true value of an investment based on of supply and demand in the market place. While market value is determined by using an appraisal process, It is somewhat different from investment value, which takes into consideration a person’s unique goals, objectives, and needs for the property.

An investment value can be lower or higher than the market value as it all depends on the property’s specific situation at the time. The investment value can be greater than the market value if a buyer places a higher value on the property than an informed purchaser.

For example if a company expands its premises to a larger building that’s been put on sale opposite from its current office. The company is willing to agree to a price higher than the building’s market value to ensure that competitors stay out of the area.The extra value is placed on the property by the strategic advantage the company will gain by buying the property.

Since investment value depends on the investor’s objectives, the value is unique to each investor. Different investors can use the same valuation methods and come up with different investment values. At GMR & Co our extensive knowledge and experience of  with businesses on property & land valuation in dubai, qatar, UAE and across the world, allows us to guide you to the best method for your situation and investment project. Common examples include:

Comparable Sales
The sales comparison approach is used by appraisers as well. An investor will compare similar properties on a per square foot or per unit basis.

Gross Rent Multiplier
The metric measures an investment’s value by multiplying the gross rent a property produces in a year by the gross rent multiplier (GRM). The GRM figure is derived from similar properties in the same market.

Cash on Cash Return
The cash on cash return figure is calculated by dividing the first year’s pro forma cash by the total initial investment.

Direct Capitalization
Direct capitalization is another metric used by appraisers. It involves capitalizing the income stream of a property and is a common method used to determine the market and investment value of commercial property.

Discounted Cash Flow (DCF)
The DCF model is used to calculate the net present value, the internal rate of return and the capital accumulation comparison. The ratios listed above, while providing useful information, also come with several limitations. Such constraints are solved by calculating the discounted cash flow.