Eris Property Valuation
As the world grapples with the impact of COVID-19, the property industry globally is trying to find a new normal. Now, more than ever, informed property valuations are critical in directing business decision making around property investments.
"We don't have a crystal ball, and we can't predict what's going to happen, but we can provide a valuation that's based on experience, research and benchmarking," says Mwangala Shamaila, Regional Valuer at Eris Property Group.
Eris Property Valuation Division is an independent professional service provider that operates throughout South Africa and even beyond. "We offer the full scope of valuations and advisory services, which cover a wide range of requirements including leasing, acquisition and sale, financial reporting, finance raising and maximising property performance through professional advice," explains Claire Everatt, Head of Valuations. "Many people don't know that we're independent. In fact, between 60 and 65% of our work is sourced externally."
The team services clients ranging from listed property funds to parastatals, pension funds, large private property-owning businesses and small businesses looking to purchase properties they are currently renting.
The benefit for clients of working with the Eris Property Valuation team is the combination of independent, professional valuations, and the access that the team has to the rest of the Eris group, a multifaceted national property company with expertise in every aspect of the property industry. The team benefits from pool of resources within Eris, including access to expert advice, specialist asset management and development teams.
Another factor that differentiates the Eris property valuations team from competitors is its level of experience - more than three decades' of combined national work across commercial, industrial, retail, and special purpose properties, as well as vacant land and other property related services. Furthermore, as professional valuers, the team members are governed by strict codes of conduct.
Everatt and Shamaila are both members of the Royal Institution of Chartered Surveyors (RICS), as well as the South African Council for Property Valuers. "This means we are subject to the regulations of these professional bodies, and, as members of RICS, our reports get audited by an international body on an annual basis to make sure that we are keeping in line with not only South African standards, but international standards worldwide in terms of valuation and reporting," says Shamaila. "That's also one of the other things that actually sets us apart."
Membership of RICS means valuers are held to a set of standards that encompasses professional integrity, ethics and independence. "Independence is important for accuracy," explains Everatt, adding that clients often come to a valuation with a preconceived idea of what a property is worth, but it's important for valuers to be able to justify a figure and to ensure it's accurate. These valuations are used for financial reporting purposes or sales or purchases - transactions that materially affect client businesses.
"It's also important to understand the difference between a valuation provided by an estate agent or a professional valuer," says Everatt. "A valuation performed by a qualified valuer can stand up in court, whereas one performed by an estate agent is actually not a valuation, it's just an estimate of value."
To provide a full valuation requires a lot of legwork. The Eris team starts by looking at the legal ownership of the property to investigate the title deed, and any restrictions. They look at zoning, bylaws, the municipal valuation, which dictates rates and taxes payable, and potential changes. They then examine the property itself, including a high-level look at its condition and potential problems (for example, an older industrial building might still have asbestos components, which will need to be removed). They'll look at rent being received and benchmark this against similar properties. They'll also evaluate any rental agreements in place and provide advice to the client on potential changes to maximise value or mitigate risk. At the end of this process, the client receives a full report detailing the entire process, any recommendations, and a valuation.
"What we do is an opinion and a sort of science," says Everatt. "There's never any guarantee that our valuation will be accurate - we can't say it will be within a percent, or anything like that, especially in unprecedented times like this. But we base our valuation on facts and research, so we put all of that in our reports to ensure clients understand exactly how we reached our final figure."
The Eris Property Valuation team also has access to various benchmarking tools, including MSIC and SAPOA, together with regularly updated databases and information. "This enables us to keep abreast of and track market trends in order to deliver a superior service," says Shamaila.
The department is responsible for the bi-annual valuation of the R8bn mixed use Momentum Metropolitan Group portfolio and works closely with Eris Asset Management to ensure accuracy considering the variation of property use across the portfolio.
Everatt notes that given the current market, where things change on a daily basis, re-evaluating properties will likely need to happen more regularly than previously.
For more information, contact the Eris Property Valuation team on 011 775 1000
