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Commercial property valuers and commercial property agents should stick to telling it like it is – instead of valuing property so that it pleases their paymasters, one expert has said.
Commercial property valuations are traditionally much more risky than residential valuations – as deals are much more infrequent and no two office blocks or retail parks are the same.
Valuers are paid by commercial property owners when they carry out their valuations – and so people have long questioned whether they place accurate valuations on the properties they survey, or whether they tend to up their valuations so that their employers hear what they want to hear.
Robert Peto who is UK chairman of the DTZ property group and head of the RICS (Royal Institution of Chartered Surveyors) valuation faculty, told delegates at a recent valuers conference that they must start being more realistic.
"There was evidence of deals being done at ten per cent below June 30th values – almost five times worse than the 2.2 per cent decline reported last week in IPD’s third-quarter index," Property Week quotes him as saying.
"The truth is, most investors do not believe the [IPD] numbers. We are seeing transactions being done that are ten per cent down in value on the June numbers, not two per cent.
"If your client says they are not willing to sell at a certain price, you must ignore them completely. Our job is to price the market as it is now. If the evidence is historic and we feel the market has changed, we price accordingly."