Implications of valuation methods for the management of property assets

Abstract

The valuation and management of landed properties owned by public authorities provides a useful case study for developing arguments relating to the “test of a good valuation” and in particular the inter‐relationship between purpose and method of valuation. The paper reviews the changing requirements placed on the valuation process and the growing and recognised need for valuers to be cognisant of the difference between the concepts of value‐in‐exchange (market price valuations) and value‐in‐use (calculations of worth) and to question the underlying purpose of valuations in the management process. Research work by the authors highlights the difficulties in accommodating these changes in the field of publicly‐owned leisure properties. The paper concludes that such valuations as have been prepared for leisure properties do not aid good management and are peripheral to the management decision‐making process. It suggests that for valuations to gain relevance to managers of owner‐occupied property, new concepts should be debated. In the public sector, “social value” is postulated as one avenue worthy of exploration.