Property Consultancy Services’ (PCS) has over 20 years of experience in residential, commercial, industrial and agricultural property valuation, operating throughout the Eastern Caribbean. The team has the capability to conduct all approaches to valuation within house quantity surveying services for replacement costs, extensive market knowledge through our affiliated real estate company, and the technical skills to complete the income approach to valuation.
PCS’s approach to valuations is to analyze the various components of an asset separately to establish the value of each. Their values are then combined and compared with the underlying income stream of the asset. In this way the assets are divided between real property, buildings, plant and equipment and other assets. The quality, age, useful life, state of obsolescence and working efficiency of each component are assessed.
Fair Market Value Definition
Fair Market Value is defined as the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, with each acting in what is considered in his own best interest;
(3) the price represents the normal consideration for the property sold unaffected by special or creative financing or sale concessions
granted by anyone associated with the sale;
(4) payment is made in terms of cash in local currency or in terms of financial arrangements comparable thereto; and
(5) A reasonable time is allowed for exposure in the open market;
In conducting an appraisal, the following accepted methods are utilized as appropriate:
- Replacement Cost Approach
The Replacement Cost Approach is used to estimate the value of an improved property whereby the reinstatement cost of the building is assessed (after an appropriate allowance for depreciation) and the market value of the land is added based on comparable sales data. The cost of replacement represents the cost to produce buildings of an equivalent function. - The Sales Comparison Approach
The sales comparison approach is based on the price a property would sell for in an open and unrestricted market between informed and prudent parties, acting at arm’s length and under no compulsion to act, expressed in terms of cash and achievable in a reasonable time period. It involves the direct comparison of sales and listings of similar properties with adjustments for variances. - Income Approach
The Income Approach is used to appraise real estate for investment purposes and for income generating properties such as commercial office complexes. It considers the expected net income stream from the property. The property’s projected expenses are subtracted from the projected income on an annual basis, and the value is determined by computing the present value of the projected future income streams. The projected earnings are discounted by a rate of return (discount factor) which reflects the risk of the operations of the business. - Residual Value
Residual valuation techniques are utilized by real estate developers to determine the value of developable land. The technique is applicable for properties which are improved below their highest and best use, or where the site is vacant and available for development. A residual valuation is based on the premise that the maximum amount a developer would pay for a development site is what they can afford after accounting for all costs of development including developer’s profit. The calculation of residual value involves the estimate of future revenues, expenses and risk. Once the gross value on completion of development is determined, all costs of improvements are deducted, and the remaining value is the land residual.
Selection of Clients
Insurance Corporation of Barbados Property Portfolio – Barbados
Barbados Shipping & Trading Company Property Portfolio – Barbados
The Beach House – Barbuda
Choiseul Development Site – St. Lucia
Half Moon Bay Hotel – Antigua
Secret Cove Villa – Grenada
Villa Nova Hotel – Barbados
Sugar Mill House – Mustique
Galley Bay Club – Antigua
Gray’s Point – Antigua
The Hilton Hotel – Barbados
Sandpiper Hotel – Barbados