REAL ESTATE MARKETS

Real estate markets

Table of Contents

Real estate markets2

Executive Summary2

Question 13

Question 27

Real Estate: Service Charge Settlement8

Question 311

Conclusion14

References16

End Notes18

Cover Letter20

Real estate markets

Executive Summary

Risk is recognised as an inherent element within the valuation process and in the absence of perfect data across the property market it is likely that this situation will pertain to varying degrees. If risk cannot be eliminated the valuer is required to manage the analysis of risk within the valuation process so that its impact is minimised and the end user of the valuation can have confidence in the value estimate. The literature indicates that the overall management or control of risk can be broken down into discrete activities namely, identification, measurement, management and reporting. The literature further indicates that there are significant shortcomings in current valuation practice across each of these aspects of risk management and control.

Question 1

Being a director in Rental incorporation, it's is obvious that corporate real estate is the largest cost to Rental Incorporation excluding for human resources like to build the shopping centre. Corporate real estate executives have now concentrated to information technology solutions to make more efficient their labours and lessen costs. In recent times they have stressed on improving those systems. Choosing solutions to deal with corporate real estate (CRE) can often be a multifaceted and tricky choice. A solution that works fine for small Rental Incorporation may not be satisfactory for big Rental Incorporation. Frequently the decision to deal with CRE will rotate around two basic choices: maintain the solution or outsource the data to a seller.

There may be actual savings in outsourcing CRE information management technology. It depends on the business needs of your Rental incorporation for shopping centre, its capacity to make capital investments, information system support and performance needs, and importance for information quality, delivered value and total costs in the end (Kim Lewellen and McConnell 2007 871).

Investment decision-making is concerned with choosing optimal levels of both return and risk; the risk return trade off. Consequently the principal source of uncertainty is time as the forecasting of future events is difficult and becomes more unreliable as time elapses. Uncertainty arises therefore from a lack of knowledge and information and on this premise Lewellen Long and McConnell (2006 798) construct a spectrum of uncertainty. The spectrum ranges from certainty (full knowledge) at one end to total uncertainty (lack of knowledge) at the other. In between there are two further points namely, risk and partial uncertainty. Risk is defined as a situation where alternative outcomes and their probabilities are known whereas in the case of partial uncertainty some of the alternative outcomes are known but not their probabilities.

Risk and uncertainty are inherent parts of the valuation process. Property pricing as a form of investment decision-making seeks to ascertain the present value of future income and expenditure flows. In this context risk can be defined as the probability that a target rate of return will not be realised. In other words, it assumes that all outcomes together with their ...