An examination of sustainability reporting in valuation practice: A case study of Melbourne, Australia. Issue 1 (18th February 2019)

• Record Type: Journal Article
• Authors: Thanh Le, Tu; Warren-Myers, Georgia
• Is Part Of: Property management. Volume 37:Issue 1(2019)
• Page Start: 136
• Page End: 153
• Publication Date: 2019-02-18
• Subjects: Australia -- Sustainable development -- Real estate -- Market value -- Asset valuation; Real estate management -- Periodicals; Real property -- Great Britain -- Periodicals; 333.5068
• DOI: 10.1108/PM-02-2018-0016
• Languages: English
• ISSNs: 0263-7472

Abstract

Abstract : Purpose: The importance of sustainability in the property industry is well recognised, and many studies have proved the existence of sustainability premiums in real estate markets. Valuers play the most pivotal role in reflecting the market, however despite the efforts of both academic and professional bodies to improve valuer knowledge and perceptions of sustainability there remains significant limitation of consideration of sustainability in valuation within the profession. The purpose of this paper is to investigate valuation practice through examining institutional grade commercial valuers' approaches and consideration of sustainability in valuation. Design/methodology/approach: This research used a case study approach and interviewed institutional grade commercial valuers in Melbourne, Australia, exploring their consideration of sustainability in their valuation reports for commercial properties. A semi-structured interview technique was utilised with responses using qualitative content analysis that investigated the processes used, knowledge and incorporation of sustainability in valuation practice. Findings: The study has found substantial limitations in the incorporation of sustainability in property valuation in Melbourne's real estate market, comprising valuers' limited knowledge, reluctance to consider sustainability in the valuation process, poor verification or investigation of sustainability considerations, client instructions did not direct valuers to consider sustainability, lack of data and limited tools for detailed analysis. Research limitations/implications: Although a small sample, the data redundancy found in this research suggests a level of consensus on certain aspects of practice within the sector in Melbourne. This corroborates similar findings from a large-scale study of valuers and property professionals in Europe and the UK (Michl et al. 2016). Practical implications: There is urgent need for more education and direction in the consideration and incorporation of sustainability in valuation for valuers. Enhancing the enforcement of guidelines from professional bodies is also crucial in order to deepen the analysis of sustainability in property valuation. Originality/value: The research has provided an in-depth perspective of valuation practice in the commercial sector, that identifies and expands on the barriers in regard to limited incorporation of sustainability in property valuation reports, physical reporting, comparative analysis and depth of discussion. Further, it highlights the limited consideration of guidance notes in regard to sustainability from professional bodies.