Valuing real estate

by Hansi Mehrotra

24th July 2014

Subhankar Mitra of Jones Lang LaSalle explains the basic methodologies used for real estate valuations in India.

Valuations are very important in any private equity/real estate investing not only while buying and selling but also for ongoing reporting. Hence, it’s important to understand how valuations work in India.

1. What qualifications does one need to become a real estate valuer? (0:54)

2. What is the difference between a statutory and market valuation? (1:30)

3. What is market value? (0:55)

4. Please give a comparison of the main valuation methodologies used in real estate valuation? (0:56)

5. What are some of the issues with that sort of valuation? (2:28)

6. What are the issues with a discounted cash flow method? (0:52)

7. Can you explain the concept of highest and best use? Does it take into account the possibility of rezoning? (2:41)

8. What’s the cap rate? What are some of the issues in selecting a cap rate? What’s the range of cap rates used in India? Do cap rates differ for different types of properties? (2:43)