Concrete Analysis | How a thoroughly researched valuation report can unlock value for all stakeholders

It is said that the property industry is like an ecosystem, where every stakeholder – the government, occupiers, investors, developers, banks, professional advisers and so on – work closely together, relying on each other to thrive. To maintain a healthy ecosystem and business environment, property valuation, be it for capital value or rental value, is a key connector, serving as the guiding light for all market players.

Property valuation has always played an important role in the fast-changing Hong Kong property market. Valuation principles are key in understanding how to maximise the potential and best use the assets no matter who the users of the valuation are. More so now than ever before as Hong Kong faces headwinds from the trade war and Covid-19 pandemic, valuation techniques remain a focal point amid the current volatile market.

At the core, valuation influences policymaking and amendments by providing insights to the government into land supply, land administration policy as well as implementation of redevelopment plans.

Lack of land supply has been a long-standing challenge for Hong Kong. One of the options to resolve this challenge is to develop brownfield sites. In Hong Kong, brownfield sites are agricultural land in the New Territories that has been converted into other uses due to the change in economic activities. They are used for open storage, port backup facilities, logistics operations, vehicle parking, vehicle repair workshops, recycling yards, rural workshops and storage areas for construction machinery and materials.

The government has to overcome tremendous obstacles to develop the brownfield sites. It is never easy to find alternative space to relocate brownfield operations. Added to this is whether these sites really have potential for development.

Valuation therefore came to the rescue and has a vital role to play. For example, we have helped agricultural land owners to explore the feasibility and development potential of converting their land into residential property, and have assisted them in resolving issues arising from lease modification and land premium handling.