Practice Briefing: The implications of a move towards explicit discounted cash flow (DCF) models for property investment valuations

What is it about?

This briefing explores the implications of a recommendation by the Royal Institution of Chartered Surveyors (RICS) to shift towards explicit discounted cash flow (DCF) valuations in the real estate industry. Traditional valuation methods often lack sophistication, hindering thorough analysis and understanding of individual assets and portfolios. By adopting explicit DCF valuations, which involve modeling assumptions about cash flow and growth rates, transparency and accuracy in valuations can be enhanced. This shift could lead to more informed discussions between clients and valuers, ultimately improving confidence in valuation accuracy and enabling more sophisticated asset modeling, market data analysis, and forecasting.

Featured Image