Real Estate Valuation of a Property for Internal Purposes

The real estate valuation of a property for internal purposes is a highly important process for companies, property owners, or investors who want to know the real value of a property in order to make informed decisions. Unlike valuations used for financing or transactions, valuations for internal purposes are carried out to help companies properly manage their assets, optimise financial operations, or plan future real estate developments.

Activ Property Services is a leader in real estate valuation and provides valuation services for internal purposes, tailored to each client’s needs. Discover how a real estate valuation for internal purposes is carried out correctly and efficiently, and why it is useful to work with ANEVAR-accredited professionals.

What Does the Real Estate Valuation of a Property for Internal Purposes Mean?

The real estate valuation of a property for internal purposes is a process through which the market value of a property is established, without the valuation being used for an immediate sale or financing process. This type of valuation is used for asset management, financial reporting, internal audits, or strategic investment decisions.

For companies, real estate valuations for internal purposes are extremely valuable because they provide a clear picture of the real estate assets in their portfolio. For example, a company that owns several commercial buildings may use such a valuation to decide whether to continue using them, make improvements, or invest in new acquisitions.

The purposes of an internal valuation include:

1. Asset management: Internal valuations help companies understand the value of the properties they own, making it easier to make decisions regarding investments or improvements.
2. Investment planning: Internal valuations are critical when companies consider future investments or the restructuring of their real estate portfolio.

How Is the Valuation Process Carried Out at Activ Property Services?

Activ Property Services applies a detailed and personalised process for each valuation, depending on the specific characteristics of the property and the client’s needs. The valuation process includes several stages that ensure an accurate and objective analysis.

1. Preliminary Analysis and Document Collection

The first step in valuing a property for internal purposes is collecting all relevant documents. These include:

• Ownership documents;
• Building plans and sketches;
• Information about recent improvements or renovations;
• Tax and financial reporting documents.

These documents are necessary to provide the valuer with a complete picture of the property before beginning the physical inspection.

2. Property Inspection

A physical inspection of the property is an essential step in any real estate valuation. The team of valuers at Activ Property Services visits the location to analyse details such as:

• The condition of the building and level of maintenance;
• The exact dimensions of the property and the layout of the spaces;
• The quality of construction materials;
• The functionality of the property in relation to the purpose for which it is used, such as commercial, residential, or industrial.

3. Real Estate Market Analysis

After the physical inspection, the valuers at Activ Property Services carry out a detailed analysis of the real estate market. This includes studying recent transactions in the area where the property is located, analysing market supply and demand, and identifying economic and social factors that may influence the value of the property.

4. Applying the Valuation Methodology

There are several approaches used to value a property, and Activ Property Services selects the appropriate method depending on the purpose of the valuation and the type of property. The three approaches included in the ANEVAR Valuation Standards for Assets are:

• The market approach: Used for all types of properties for which there is an active market and complete, accurate information regarding recorded transactions or offers for similar properties in the same area. The valuer analyses a series of essential criteria recognised by the market, such as location, usable area, quality of finishes, and others, which are then adjusted according to the differences between the property being valued and the selected comparable properties.
• The income approach: Particularly applicable to income-generating properties, such as office buildings or retail spaces. The income approach provides an indication of the value of a property by converting annual cash flows into a present value.
• The cost approach: This may be used for all types of real estate assets. Depending on the method selected within this approach — replacement cost or reproduction cost — the valuer estimates the cost of constructing a similar or identical building as new, then applies deductions for physical depreciation, functional depreciation, and external or economic depreciation, to which the estimated value of the land is added.

5. Final Report and Conclusions

After analysing all the collected data and applying the appropriate methodology, the valuers prepare the final report. The report includes a detailed description of the property, the real estate market analysis, the approaches used, and the final estimated value. This value supports internal decision-making, whether it concerns optimising the use of the property or planning future investments.

The report is structured in a clear and concise manner, so that it can be easily understood and used by the company’s internal departments. The report also complies with all ANEVAR standards, providing confidence that the valuation is accurate and objective.

Why Choose Activ Property Services for Real Estate Valuation for Internal Purposes?

1. Expertise and professionalism: The team of valuers at Activ Property Services has extensive experience in carrying out real estate valuations for companies across various industries. Each report is prepared with attention to detail and in compliance with all legal and technical requirements imposed by ANEVAR.
2. Personalised valuations: Depending on your company’s needs, Activ Property Services provides personalised valuations to help you obtain a clear and accurate picture of your real estate assets.
3. Compliance with ANEVAR standards: All valuations are carried out in accordance with the Valuation Standards for Assets issued by ANEVAR, ensuring maximum accuracy and compliance with current regulations.
4. Transparency and objectivity: The reports provided by Activ Property Services are fully impartial and based on concrete data. Each valuation is carried out with integrity, giving clients the confidence that the established value is fair.

Real estate valuation for internal purposes is essential for companies that want to manage their assets efficiently and strategically plan future investments. Activ Property Services provides professional valuation services carried out by ANEVAR-accredited valuers, offering a complete and accurate picture of your properties.

Whether you are a company looking to optimise your real estate portfolio or improve financial reporting, you can rely on the experience and professionalism of Activ Property Services for an efficient and accurate valuation.