Theoretical volatility measures for freehold property investments
Adams, A. T.
Theoretical volatility measures for freehold property investments - 1993 - Journal of Property Research 10(3) Winter 1993, 153-166(8) .
The value of a freehold property, let with regular rent reviews, is developed using an explicit discounted cash flow (DCF) approach. This enables formulae to show the effect on property values of changes in the investor`s required rate of return and of changes in the anticipated growth rate of rental values. By reformulating the equations in real terms, it is then possible to derive a formula for the theoretical inflation volatility of a property value. The advantages of the explicit DCF approach to property valuation and the usefulness of theoretical volatility measures in property investment analysis are discussed. (Journal abstract)
DISCOUNTED CASH FLOW
INVESTMENT ANALYSIS
RATES OF RETURN
RENTAL VALUES
VALUATION FORMULA
VALUATION METHODS
VOLATILITY MEASURES
Theoretical volatility measures for freehold property investments - 1993 - Journal of Property Research 10(3) Winter 1993, 153-166(8) .
The value of a freehold property, let with regular rent reviews, is developed using an explicit discounted cash flow (DCF) approach. This enables formulae to show the effect on property values of changes in the investor`s required rate of return and of changes in the anticipated growth rate of rental values. By reformulating the equations in real terms, it is then possible to derive a formula for the theoretical inflation volatility of a property value. The advantages of the explicit DCF approach to property valuation and the usefulness of theoretical volatility measures in property investment analysis are discussed. (Journal abstract)
DISCOUNTED CASH FLOW
INVESTMENT ANALYSIS
RATES OF RETURN
RENTAL VALUES
VALUATION FORMULA
VALUATION METHODS
VOLATILITY MEASURES