Næringsmegleren

Valuations are an important part of the business at Næringsmegleren. The assignments can vary in both scope and duration - but common to all of them is finding the right market value for a property.

For property owners, potential buyers, banks and others, there is one recurring theme - what is a property worth and what is the estimated market rent for this property? What influences the value and how do we define the correct market value?  

Valuations are an important part of the business at Næringsmegleren. The assignments can vary in both scope and duration - but common to all of them is finding the correct market value for a property. Our task is to establish a sober but correct valuation of the property. 

But let's start from the beginning. What are we assessing the value of - and when do you need one? 

Here at Næringsmegleren, we specialize in commercial properties. This can be anything from land, office buildings, retail premises or warehouse/logistics facilities. Valuations are becoming more and more in demand, and are often used in connection with transfers between related parties, refinancing, assessment of sales, or in cases where people believe that the basis for property tax or asset values are not correct. In addition, there are larger companies that provide International Financial Reporting Standards (IFRS) where there is a need to update real values every year.

How do we carry out such a process - and what do we look for?

It is largely a question of what return the property in question provides or can provide. We consider location, tenants, solidity and duration - and look at risk factors such as industries, tenant composition, etc. Other factors that come into play may include the extent to which the existing rent represents ordinary market rent or whether it is above or below this. In addition, we assess the potential and challenges of properties.

A commonly used term is yield - what is it all about?

In short, it means yield or the buyer's demand for a net return on their investment. Yield is affected by, among other things, the length of the contract, location, rent level relative to market rent, and the solidity of the tenant. The lower the yield - the higher the property value, but also the lower the risk. If the risk is high, the yield will also be higher; many will recognize this dynamic from e.g. the stock market, where the principles are the same. The higher the risk - the higher the return a buyer will demand. If you want lower risk, the investment is safer and you accept a lower return. 

Today, the environment and sustainability is also an increasingly relevant topic in the real estate sector. How does this play into valuations?

More and more real estate investors are looking for good properties with a good environmental profile and solutions that reduce energy consumption, focus on recycling, etc. Environmental certifications such as BREEAM for new buildings are a clear signal from the owner/developer that sustainability is taken seriously. Reuse of existing buildings where the owner and tenant together implement environmental measures is another example. Both have a positive impact and make the property more future-oriented and attractive. More investors are willing to pay more for buildings where this is taken seriously - a trend we believe will strengthen in the years to come.

What about the development potential of properties?

This is always an important consideration. Can the premises be used for something else? Will it be more attractive to other industries? Will rezoning from commercial to residential make the property more attractive and valuable? Can more buildings be built on the site? Will upgrading the property be profitable? All these topics are important when we make our assessments. Our valuations are often followed up by a conversation where we give advice on how the owner can best optimize the value of their property. 

Do you have a property that needs a valuation? Or are you considering measures to make your property even more attractive? Get in touch for a no-obligation chat.