Can one be a valuer by intuition?
Up to January 2020, it was perfectly feasible to have some intrinsic knowledge on how much your property was worth without having to resort to any sort of in-depth data analysis.
At the start of the year, assuming that your property was worth more than you paid for it a couple of years back, was probably a pretty safe bet. Fast forward to June and the bets are off.
The pace at which transactions are occurring has slowed down, the usual market buzz that comes from people buying and selling seems to have become a subtle murmur instead. So how are commercial real estate owners, investors and lenders, supposed to feel confident amidst the COVID-19 induced market silence?
The need for confidence in their property’s value is higher than ever, but business disruption has made it very hard to have a current observation of a recent comparable sale. It may simply not exist. If there are a few sales that are truly comparable, which have sold in the last few months, that information is solid gold.
However, are a few data points statistically relevant? When does that data become obsolete? The sentiment of buyers and sellers seem to be shifting rapidly, as does the information in the news cycle.
CBRE Cambodia’s Valuation and Advisory Services represents the largest commercial appraisal firm in the world. We have thousands of clients that count us to be a trusted advisor in times such as these. We are frequently asked: how are you approaching your valuations in this economic climate? How can you be confident in your opinion of value?
We believe that we are uniquely equipped to provide credible guidance to our clients, for a variety of reasons, including our proprietary data and technology. One of our most powerful resources is the volume of professionals that we have, sitting across a multitude of departments. These experts are talking with buyers, sellers, tenants, investors and lenders every day.
Our professionals and valuers have in-depth discussions with these market participants about the most complex valuation issues and get to hear a very broad sample of the most relevant market sentiment.
This allows us to inform our clients about the market sentiment and answer questions such as; Has the demand for development land stabilised? Is market rent stable for office supply in Phnom Penh? These are the types of questions for which our clients need reliable and current answers.
Ultimately, appraising real estate is about accurately predicting the sales price that a buyer and seller would negotiate on a given date. Therefore, all valuation research and analysis revolve around knowing the minds of these two parties at that time.
As the economy grows quieter, our team is listening even harder.
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