A cost-based valuation method giving the current cost of replacing an asset new, less deductions for physical, functional, and economic obsolescence; used for specialised properties with no market evidence.
Related terms
- Depreciation
The loss in value of a building over time from physical, functional, or economic causes.
- Discounted cash flow (DCF)
A valuation that discounts projected future cash flows to present value.
- Equated yield
The internal rate of return on a property investment that accounts for expected rental growth over the holding period, used in explicit cash-flow appraisals.
- Fair value
The price that would be received to sell an asset in an orderly transaction between market participants, as defined under IFRS 13; broadly aligned with market…
- Forced sale value
The amount realisable where the seller is under compulsion to sell within a restricted marketing period; typically below market value and specific to the const…
- Going concern
A valuation basis assuming the business or property continues to trade and operate as at present, capturing the value of an operating enterprise rather than ba…
- Gross development value (GDV)
The total expected sales or capital value of a completed development.
- Hardcore and top-slice method
An investment technique that splits income into a secure base layer (hardcore) and a riskier layer above it (top-slice), applying different yields to each to v…