Theoretical volatility measures for freehold property investments
Language: English Series: Journal of Property Research ; 10(3) Winter 1993, 153-166(8)Publication details: 1993Subject(s): Summary: 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)| Item type | Current library | Call number | Copy number | Status | Barcode | |
|---|---|---|---|---|---|---|
| Journal article | London Journal article | ABS50042 (Browse shelf(Opens below)) | 1 | Available | 73807-1001 |
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)