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News & opinion

29 JUL 2019

Increasing confidence in real estate valuations

With $228 trillion tied up in global real estate, as per the Savills World Research Report, failure to understand the value of assets can have severe global consequences for investors, shareholders and the public.

With the industry evolving at a fast pace, establishing transparency of data and encouraging more accurate financial reporting is vital in supporting businesses and de-risking financial markets for the public good.

Fostering transparency 

Transparency is a crucial tool to encourage investment and to develop the real estate market further. For investors and end-users to understand risks that result in greater uncertainty and slower decision-making process, transparency is essential. Lack of it can not only lead to a negative impact on the market, and its appeal to investors, but it also fuels the number of disputes that can arise between parties.

According to Anthony Taylor, Emirates NBD Asset Management’s Head of Real Estate, transparency is the key aspect that could see more improvement in the current valuation market. He states that transparency in the valuation methodology is something in which there is always room for improvement, as it ultimately gives real estate investors’ confidence in both individual assets and the broader market.

We think valuation practices in the region have improved markedly in recent years, but there is always room for the industry to do better.

Anthony Taylor
Emirates NBD Asset Management

Considering this and to reduce risk, ENBD REIT, one of the leading real estate investment trusts in the GCC region, which is managed by Emirates NBD Asset Management, has signed an agreement with RICS to only use RICS registered valuers to conduct valuations on their behalf.

Confidence in valuations

With a property portfolio valued at USD 450 million, accurate valuations are essential for ENBD REIT. RICS regulated valuers bring a level of professionalism that ENBD REIT understands will give them greater confidence in valuations conducted in the region.

Taylor believes that accurate and transparent valuation of their portfolio is key for decision making, providing a clear view of the performance of their assets in the context of the broader market. Valuations, he adds, are also of vital importance to their stakeholders and prospective investors, therefore it is essential to continue having transparent portfolio valuations.

All RICS valuers are obligated to adhere to a risk monitoring and quality assurance programme, which checks compliance with the RICS Red Book, and incorporates the International Valuation Standards.  The RICS Valuer Registration scheme is recognised globally as one of the most rigorous sets of standards for valuation, and it details mandatory practices for professionals undertaking valuation services. The scheme, which was introduced in 2011, is now mandatory for RICS professionals in most countries around the world, with about 16,000 registered valuers worldwide.

As a REIT, we’re firmly committed to appointing the highest-quality and most credible valuers available in the market. RICS has a reputation for certificating valuers who meet this description, and so our shareholders can take comfort in the expertise and diligence that is applied to our independent valuation process.

Anthony Taylor
Emirates NBD Asset Management

By reducing risks, contributing to greater transparency of data, creating stronger investor confidence and more accurate financial reporting RICS registered valuers provide confidence and professionalism, leading the way in accurate valuations.