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CEDES Valuation Seminar

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Cushman & Wakefield together with CiJ and other professionals pioneered an immensely successful and interesting thought leadership event at The Radisson Blu Carlton Hotel which well over 80 representatives of developers, financial sector (commercial banks and NBS), local valuers and RICS qualified valuers, auditors, lawyers and consultants attended. The seminar compared the different valuation systems applied in Slovakia, considering the various pros and cons of the approaches. The issues were debated by an experienced panel of developers, bankers, valuers and auditors.

Andrew Thompson, Managing Partner of Cushman & Wakefield in Slovakia, said: “Our Slovak and International clients have both found that the application of the local valuation system under Slovak law has significant challenges in respect of producing a helpful market valuation. Whilst the aims of the Slovak valuation system are similar to international RICS standards, the methodologies set out within the Slovak system are too prescriptive according to many practitioners. This leads to situations where, for example, we have been asked to sell commercial real estate and where the Slovak valuation report has borne no resemblance to the estimated realisable market value. Despite this, the valuations still conform technically to the Slovak valuation system. This is clearly of no help to anyone.“

He added, “The RICS* valuation standards are adopted in over 100 countries and are fully compliant with the International Valuation Standards and IFRS. Whilst organisations are free to choose which valuation systems they use for accounting purposes, the Slovak National Bank requires Slovak banks to report the value of their collateral only according to the Slovak valuation standards. This is despite the fact that the banks themselves feel that this is unrepresentative of market reality, especially so in the case of commercial developments and standing investments. Many leading Slovak developers and investors also prefer to use the RICS valuation system.

“I am delighted to have attended this event where the differences between the local (Slovak) valuation standards and the IVS/RICS standards were presented. As agreed by participants both standards apply similar definitions and approaches. Nevertheless the main difference is in the particular execution of the calculations and sources of comparables. Whereas the local Slovak valuers base their valuations mainly on asking prices as well as through the application of more or less subjective coefficients and capitalization rates from the base rate set by National Bank of Slovakia, international valuations reflect real requirements and expectations of (actual & potential) investors. Although locally licensed valuers will be allowed to have direct access to purchase agreements registered at Cadastral Registers from next year and will thus gain information about transacted prices, this is relevant for residential properties because the vast majority of commercial property in Slovakia is transacted via share deals and thus not registered,” said Aneta Lendvayova, Head of Valuation & Advisory at Cushman & Wakefield in Slovakia. She went on to that for market value to be correctly stated, the correct input data has to be applied. She emphasized the benefit that leasing and investment departments bring to valuers working from within larger real estate agencies in terms of information supply. “We could not conduct any valuation without the strong background and support from our agency colleagues” Lendvayova added.

“One of the benefits of the RICS system is that it uses capitalisation rates and market rents from the market rather than using the base rates of the Slovak National Bank or ECB. The agencies practising RICS valuations in Slovakia have the appropriate data which utilise these market capitalisation rates and thus, by basing their valuation models on these actual transactions from the market are therefore in a position to provide more realistic and hence more useful valuations” Thompson added.

*RICS „Royal Institute of Chartered Surveyors“


Zuzana Gurova

Head of Marketing

Bratislava, Slovakia

Phone +421 2 59209366

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