Retail Property Valuation

Retail Property Valuation

Obtaining an accurate estimate of a property’s market value is critical for both the buyer and seller. In addition, it aids in determining how much your estate is worth at the point of valuation.

The estimation assists the party in negotiating the best deal on their real estate transaction. Below is comprehensive information on retail property valuation and its process.

What is Retail Property Valuation?

Retail property valuation is a zoning classification for property used for shops, business centres, or service businesses. Another term for retail property is real estate. According to relative value methods, two comparable financial assets should be priced similarly based on earnings.

The COVID-19 pandemic hit retail properties the hardest. As a result, capital investment in retail property fell by 10.7 % in Europe, the Middle East, and Africa in the preceding twelve months to the second quarter of 2021.

Ratios such as price-to-earnings (P/E) and price-to-sales (P/S) are compared to other businesses in the same industry to determine whether a stock is underA or overvalued.

Approaches to Property Valuation

The Sales Comparison Approach

Experts will likely use the sales comparison approach when evaluating a residential property. As the name implies, this method compares recently sold properties to the subject.

The properties chosen for comparison, or “comparables,” should always be comparable to the subject property in terms of geographic location, tax categorisation, and basic property characteristics.

Professionals find comparables by reviewing real estate publications, official records, and real estate agents, among other sources. Further, comparables are frequently adjusted by experts based on their degree of similarity to the subject property.

The Cost Approach

Valuation experts typically use the cost method for commercial properties, including special-use and new commercial properties.

This approach values real estate by adding the total cost of the land’s value plus any improvements and subtracting any depreciation or modifications. The cost approach frequently yields the upper limit of a subject property’s value.

The Income Approach

Appraisers and valuation professionals frequently use the income method to determine any income-producing property’s worth. Because of the large amount of market data available, the income approach is widely regarded as the most relevant to these property types.

This model-like method directly reflects market expectations and behaviour patterns by calculating how much investors would fetch from renting their property.

Factors That Determine the Market Value of a Property

One of the most critical factors influencing retail property value in real estate is location, which includes nearby transportation options. Therefore, infrastructure development in the surrounding area is one of the most significant factors affecting real estate valuation.

The existence of transportation links and other support facilities contributes to increasing the property value. As a result, the valuation of properties with better infrastructure functionality and modern amenities is relatively high than those that do not.

Lastly, access to transportation is another critical factor that can significantly affect the value of your property. The more transportation modes your property is linked to, the higher its value.

Property Condition
The building’s quality is also essential. A brand-new, high-rise apartment will generally be valued higher than a run-down unit that has not been well maintained. Take note of building ratings and how your asset compares to similar properties in the vicinity.

In addition, ensure your property is well-maintained. The asset should be visually appealing and have a well-kept interior and exterior. Minor improvements, such as painting and thorough cleaning, can impact a small investment.

Necessary Paper-Work
Another important factor influencing the value of the retail property is whether you have all the required paperwork. This is the necessary paperwork even needed after receiving your license and approvals.

Furthermore, a property with planning permission to extend or make substantial modifications will increase in value because it will provide the unit with more opportunities.

Why Choose Land Sterling Property Valuation Services
Land Sterling property valuers have years of experience and knowledge in the real estate industry. Our team of professionals is committed to ensuring that we deliver services that adhere to the highest standards governed by RICS and RERA.

Our 12+ years in the valuation of malls & shops are customised to the requirements of our clients. This ensures that every property is assessed and valued at an affordable price.

Whether you are looking for a valuation for your retail property or a more comprehensive report for your property portfolio, we are here to serve you. Contact us today for more information.


1. What is the market value of a property?
The fair market value of a real estate is the sum you could sell it for if you sold it that day in normal market conditions without the use of a real estate agent. It is influenced by several factors, such as the property’s characteristics, the market in your specific area, and the purchase or sale pressure.

2. Who determines fair market value?
Buyers and sellers alike determine the fair market value of the real estate. The appraiser or assessor investigates real estate transactions in a local area to determine what factors affect ultimate sale prices.

3. What is the difference between fair market value and retail value?
Fair market valuation (FMV) is a notional value determined by estimating how much a buyer and seller may ultimately agree on under “normal” conditions. In contrast, market value is the amount that a property will sell.

4. How is market value determined for a property?
Combining the income from the property with the capitalization rate is a common method for calculating investment property values, and it gives investors a good idea of the property’s value as an investment.

5. What does estimated property value mean?
Estimated property value is an estimate of how much your property would sell for based on recent sales of similar properties


Vinodh Mahadevan

Head of Valuations & Advisory


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