Industry experts this morning expressed concern as to whether lending institutions were again failing to sufficiently take into account the significance of the valuation report as a key document in deciding to access and acquire risk.
It is widely accepted that the valuation of commercial property underpins the assessment of risk in respect of lending decisions for the entire property market.
Speakers at this morning’s event hosted by QRE and Finance Ireland were in agreement that any failure to understand the value of assets can have dire consequences not only for the borrower, but for the lending institution and the country as a whole as demonstrated during the crash.
“Lenders must ensure that firms being instructed to undertake the valuation has the appropriate competency. Commercial valuations are highly complex and the determining factor when selecting the valuation services provider should be competency and not price,” said Paul McElearney Director of Professional Services at QRE.
During the event, speakers from Dublin Institute of Technology (DIT), Finance Ireland, Goodbody Stockbrokers and QRE discussed issues surrounding commercial property valuations and how these concerns might best be addressed.
“There is a great divide emerging in many markets that are undergoing stress or uncertainty whereby the capital markets have simply stopped believing valuers. This is most evident now in the UK where some listed property companies are trading at almost half their ‘on-paper’ value. This disconnect will be addressed over time, but for now such a divide is presenting major opportunities for some, and greater challenges for many,” said Colm Lauder, Senior Real Estate Analyst at Goodbody Stockbrokers.
The valuation of properties is a complex process requiring a high level of expertise and today’s event highlighted how more accurate valuations would bring benefits to the wider commercial property sector.
“High quality valuations are increasingly less a numbers game, and more about understanding the impact of differing assumptions. While a good valuation is the basis for informing how a one off transaction might happen, a great valuation is the basis for informing how future transactions might happen,” said Ken Murnaghan, Managing Director of Finance Ireland.
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Notes to editor
This morning’s event titled, Commercial Real Estate – The Valuation Debate saw Ireland’s leading commercial real estate experts come together to discuss how to improve the valuation system in Ireland.
The event was hosted by QRE and Finance Ireland in the Intercontinental on the morning of Thursday 19th April.
QRE is the fastest growing independent commercial property agency in Ireland and the only agency specialising in properties valued between €1 and €20 million. It provides advice and services around commercial property, namely sales, lettings, advisory and asset management.
Finance Ireland is the largest non-bank lender in the retail market. It specialises in motor finance, asset finance and leasing, commercial mortgages and agri finance. It is currently considering entering the residential mortgage market.
Speakers at the event:
For further information contact Melanie McDonald, Red Flag (Dublin), firstname.lastname@example.org, +353 86 047 4531 / +353 1 634 4533.
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