The value of a property assuming it is sold with no tenant in occupation, giving the buyer immediate use; often differs sharply from the investment value of the let interest.
Related terms
- Valuation date
The specific date to which a valuation applies, since values change over time.
- Yield gap
The difference between property yields and the yield on risk-free assets such as government bonds, used to gauge whether property is attractively priced relati…
- All-risks yield
The single capitalisation rate that reflects all the risks and growth prospects of an asset.
- Comparable evidence hierarchy
The ranking of transactional evidence by reliability, from open-market completed transactions at the top down to asking prices and hypothetical opinions; value…
- Comparable method
Valuing a property by reference to prices achieved on similar assets, with adjustments.
- Cost approach
Valuing a property as the cost to replace it, less depreciation, plus land value.
- Depreciated replacement cost (DRC)
A cost-based valuation method giving the current cost of replacing an asset new, less deductions for physical, functional, and economic obsolescence; used for…
- Depreciation
The loss in value of a building over time from physical, functional, or economic causes.