Direct Real Estate Investment Evaluation - An Asset Dividing Appraisal Model Approach

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F29142890%3A_____%2F16%3AN0000038" target="_blank" >RIV/29142890:_____/16:N0000038 - isvavai.cz</a>

Result on the web

—

DOI - Digital Object Identifier

—

Result language

angličtina

Original language name

Direct Real Estate Investment Evaluation - An Asset Dividing Appraisal Model Approach

Original language description

The Asset Dividing Appraisal Model (ADAM) enables the appraisal of cash flows resulting from direct real estate investments. The model is an evaluation tool, which takes capital markets and the specific characteristics of real estate as an asset (heterogeneity, site-dependency, eternal land-yield, etc.) into consideration, while also considering different ownership approaches of real estate in the European Union. Thus, it contributes to the harmonization of capital markets and of direct real estate investment evaluation as intended by the “European Directive on Markets in Financial Instruments 2004/39/EC”. ADAM is based on financial mathematical instruments and on the property valuation methods of different cultural areas. It combines continental European (German Gross Rental-Method) and international (Discounted Cash Flow-Method) property valuation approaches. Although it is scientifically reasonable to take property valuation approaches into account, the aim of the model is not to valuate a property or to quantify an “objective” market value but to evaluate cash-flows resulting from direct real estate investments. A mathematical analysis based on empirical market data confirmed the validity of the methodology of the model. In the course of the analysis the major input variables that determine the results of the model and how the model reacts to marginal deviations of input data, were quantified. This was done using partial derivations and a simulation study. In Czech Republic a building isn’t actually considered as a part of the underlying plot. Consequently, differing persons or institutions can be owner of the building, as of the appropriate plot. From 2014 on, a suitable reformation of the Czech Civil Code is supposed to cause a consolidation of real estate property. Czech law is going to be adjusted to German law, which considers land and building as an economic entity. This consolidation of real estate could be an approach of the introduced model.

Czech name

—

Czech description

—

Type

B - Specialist book

CEP classification

AH - Economics

OECD FORD branch

—

Project

—

Continuities

N - Vyzkumna aktivita podporovana z neverejnych zdroju

Publication year

2016

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

ISBN

978-3-944072-71-5

Number of pages

184

Publisher name

uni-edition GmbH

Place of publication

Berlin, Germany

UT code for WoS book

—