Features of determining the market value of retail real estate and individual trade related properties during pre-trial evaluation and forensic examination

Abstract

The present article deals with the specifics of valuation of retail property and individual trade related properties on the basis of the international experience and as recommended by International Valuation Standards and RICS (The Royal Institution of Chartered Surveyors (Great Britain)) valuation standards (Red Book). The present article is justified as currently Russia lacks a standard, uniform for the valuers or legal experts, to be used for the purposes of valuation of similar subjects. At the same time, methodical literature is insufficient while there are numerous property disputes that call for pre-court valuations and expert evidence of valuation of such subjects, including numerous litigations arising out of bankruptcy or establishing cadaster value to the amount of market value. The author reviews the existing approaches to valuation of real estate in accordance with both the international and national standards and awards professional recommendations pertaining to the use of the income approach to value retail real properties and individual trade related properties. The definitions and metrics of the above real properties’ groups are described separately. Also, the author provides guidelines for inquiry of the documents and information necessary for the acquisition of the data to be used in the course of valuation and expert evidence. All pricing factors are described in detail in the present article against the examples of retail real properties and individual trade related properties (say, hotel) and explanation of their effect on the market value in case the income approach is applied is provided.