Guest editorial

Citation

Eng Ong, S. and Ming Yu, S. (2002), "Guest editorial", Journal of Property Investment & Finance, Vol. 20 No. 3. https://doi.org/10.1108/jpif.2002.11220caa.001

Guest editorial

This issue carries five papers selected from the 9th World Valuation Congress held in Singapore from 26-28 April 2001. A total of 40 papers were presented, including three keynote and four plenary papers. While the main focus was on property valuation, a diverse range of topics was covered, reflecting the theme of the conference "Real property valuation in a dynamic environment". Broadly, the papers can be categorized into four main areas: valuation theory, valuation practices, value trends and market cycles, and the application of information technology in valuation. The five papers in this issue reflect the kind of research and debate that is current in each of these areas.

Two challenges to traditional valuation theory are presented by Sing and Gwin and Maxam. Sing applies the option pricing model to the valuation of industrial leases with renewal options. While existing practices of using discounted cashflow techniques and market comparisons are able to produce the market value of the interests, they are not able to account for the premiums for the renewal options embedded in the lease. In a world of increasing uncertainty, the idea of paying for a right or interest in the future must certainly deserve greater attention.

Gwin and Maxam attempt to justify the theory that valuations nearly always equal offer price. Using game theory, they construct a model to argue that a moral hazard problem can arise if the mortgagee rewards the valuer with future business for successful valuations. Such studies on the behavioural aspects of valuation contribute not only to a better understanding of valuation practice, but also add value to research in valuation theory.

While not addressing the valuation of shopping centres per se, Faishal's paper highlights new factors which influence shoppers' choice of shopping centres. In addition to the general shopping centre attributes and conventional measures of travel in terms of time, distance and cost, other attributes of travel, such as safety and comfort, also determine the selection of shopping centres. These have implications for their valuation, as well as market analysis and feasibility studies.

The relationship between property development and market value is examined by Han et al. The paper explores the dynamics of the spatial distribution of residential property values in Singapore in the 1990s. Using the geographic information system (GIS), it maps the distribution of value patterns over time and analyses the impact of urban planning and development control on residential property values. The use of GIS certainly enhances the visual appreciation of the spatial distribution of property values and will no doubt become an important tool for the valuer in future.

Finally, the application of new information technology tools is further boosted by Fisher's paper on real time valuation. The paper demonstrates how automated valuation models using a database of valuation data could provide real time interim updates of market values of individual properties. Such real time information is crucial in an increasingly sophisticated and globalised investment environment. Property valuation therefore needs to improve on its delivery and timeliness in order to gain investors' confidence in its performance.

Apart from these five papers, which reflect interesting research ideas in valuation, there were other academic as well as practice papers presented at the conference, which collectively add to the body of knowledge in property valuation. As regards the objective of international conferences, the 9th World Valuation Congress has been successful in bringing together new ideas and issues from academia as well as the profession and from different countries for discussion and debate.

Seow Eng Ong and Shi Ming YuGuest Editors