2001
DOI: 10.1108/14635780110383695
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An assessment of the impact of valuation error on property investment performance measurement

Abstract: Analyses the effect of valuation error on the implied precision of investment performance measurement of property assets. A prerequisite for measuring the absolute or relative performance of commercial property investments is that valuations provide a reliable proxy for prices. However, there are conceptual and empirical grounds to suggest that uncertainty is inherent in the valuation process. This is primarily due to the structure of the commercial property market and the techniques and guidelines of the prop… Show more

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Cited by 25 publications
(35 citation statements)
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“…Even in the property portfolio context, valuation inaccuracy leads to sub-optimal portfolio performance. Bowles et al (2001) assert that property portfolio performance is based on valuation as a proxy for transaction price. Despite the general assumption that inaccuracy in valuations is likely to cancel out, Bowles et al (2001) and Cannon and Cole (2011) prove that the portfolio performance is under-or overvalued.…”
Section: Accuracy and Variation In Valuationmentioning
confidence: 99%
See 1 more Smart Citation
“…Even in the property portfolio context, valuation inaccuracy leads to sub-optimal portfolio performance. Bowles et al (2001) assert that property portfolio performance is based on valuation as a proxy for transaction price. Despite the general assumption that inaccuracy in valuations is likely to cancel out, Bowles et al (2001) and Cannon and Cole (2011) prove that the portfolio performance is under-or overvalued.…”
Section: Accuracy and Variation In Valuationmentioning
confidence: 99%
“…Bowles et al (2001) assert that property portfolio performance is based on valuation as a proxy for transaction price. Despite the general assumption that inaccuracy in valuations is likely to cancel out, Bowles et al (2001) and Cannon and Cole (2011) prove that the portfolio performance is under-or overvalued. In fact, Bowles et al (2001) reinforce the argument that the aggregate performance of a property portfolio may not necessarily be due to its underlying investment performance.…”
Section: Accuracy and Variation In Valuationmentioning
confidence: 99%
“…There is increasing institutional, legal and professional acceptance that valuation uncer-tainty exists and persuasive grounds to expect its presence (RICS, 1997;Bowles, McAllister and Tarbert, 2001). Values can be difficult to assess due to different concepts of value and the heterogeneity of property including the number of transactions that occur at prices that do not represent market values.…”
Section: Valuation Uncertaintymentioning
confidence: 99%
“…¡ . Aluko Matysiak and Wang, 1995;Blundell, 1995;;Adair, Hutchison, MacGregor and Nant-hakumaran, 1996;Ogunba, 1997;Ogunba and Ajayi, 1998;Parker, 1998Parker, , 1999Graff and Young, 1999;Bowles, McAllister and Tarbert, 2001;Harvard, 2001 andBretten andWyatt, 2001). Nevertheless, of all the previous studies none has investigated the reliability of mortgage valuations for institutional lending in Nigeria.…”
Section: Introductionmentioning
confidence: 99%
“…These viewpoints (value estimation and price prediction) rarely agree and, have received widespread attention over an extended period and the current situation is at best an uneasy truce especially as related to either valuation accuracy or variance (Lusht, 1983;Vandell, 1982;Downs, 1991;Roberts and Roberts, 1991;Parker, 1998;Bretten and Wyatt, 2001;and Bowles, McAllister and Tarbert, 2001). For instance, the traditional definitions, as explained above under the two schools of thought, create confusion about whether valuers' role is to observe and predict market prices under prevailing conditions or alternatively to define and create price estimates under a set of standardised assumptions.…”
Section: Value Estimation V Price Prediction?mentioning
confidence: 99%