The variability of valuation practice within Europe is perceived as a problem within the globalization of property. This edited textbook examines the practice of real estate valuation in selected countries in Europe. The focus is on countries with well developed real estate markets in which both international and indigenous investors are active. The book is aimed at real estate professionals, financiers, institutional advisers, property researchers and students who require a greater understanding of comparative property appraisal techniques applied across Europe.

First Published in 2003. This edition of the Standards has been the second to be issued for public consultation taking into account many of the comments submitted to it by individuals, companies and professional bodies. Users of the book should use the Standards and Guidance Notes as a reference tool for the sixteen comprehensive objective within.

First Published in 2003. This edition of the Standards has been the second to be issued for public consultation taking into account many of the comments submitted to it by individuals, companies and professional bodies. Users of the book should use the Standards and Guidance Notes as a reference tool for the sixteen comprehensive objective within.

We survey 356 valuation experts across 10 European countries with CFA or equivalent designation to gain some insights into their valuation practices. We find that while most experts use both Discounted Cash Flow (DCF) and Relative Valuation (RV) models, their assumptions and estimation methods for almost all inputs in models vary widely. For example, 65% (35%) use less (more) than three-year historical data for beta estimation; 58% (42%) use ex-post (ex-ante) market risk premium with subjective size or liquidity risk adjustments; 40% (29%) use market (book) value weights for WACC, and about 50% estimate Terminal Value by discounting a normative cash flow until infinity whereas others employ a decreasing cash flow or a multiple approach. In RV application, Firm Value/EBITDA is the most popular multiple used by 83% of experts, followed by PE (68%), Price-to-Book (45%), Firm Value/EBIT (45%), and Firm Value/Sales (45%). About half of respondents have also modified their discount rate, country risk, or liquidity risk estimation in the wake of the 2008 financial crisis. These wide disparities indicate that two valuation experts could arrive at substantially different valuation estimates, despite using the same model. While most disparities arise because theory provides little guidance on estimation, some are also a result of practitioners not following theoretical guidelines, such as using book value weights or not adjusting historical betas to make them forward looking. Our findings suggest that a serious debate is needed between academics and practitioners to make the valuation framework more “practical”

Just as individuals have preferences regarding the various goods and services they purchase every day, so they also hold preferences regrding public goods such as hose provided by the naural environment. However, unlike provate goods, environmental goods often cannot be valued by direct reference o any market price. Thsi amkes economic analysis of the costs and benefits of environmental change problematic. Over the past few decades a number of methods have developed to address this problem by attempting to value environmental preferences. Principal among hese has been the contingent valuation (CV) method which uses surveys to ask individuals how much they would be willing to pay or willing to accept in compensation for gains and losses of environmental goods. The period from the mid-1980s to the present day has seen a m,assive expansion in use of the CV method. From its originalroots int eh USA, through Europe and the developed world, the method has now reached worldwide application with a substantial proportion of current studies being undertaken in developing countries where environmental services are often the dominating determinant of everyday living standards. The method has simultaneously moved from the realm of pure academic speculation into the sphere of instiutional decision analysis. However, the past decade also witness a developing critique of the CV method with a number of commentators questioning the underlying validity of its dervied valuations. This volume, therefore, reflects a time of heated debate, as wellas from commentators who see it as an interesting experimental tool regardless of the question of absolute validity of estimates. The book embraces the theoritical, methodologicl, empirical, and institutional aspects of the current debate. It covers US, European , and developing country applications, and the institutional frameworks within which CV studies are applied.