The valuation of real estate plays a major role in property market.In the valuation industry there are various models used to estimate the value.The industry has made use of traditional models;however these models do ...The valuation of real estate plays a major role in property market.In the valuation industry there are various models used to estimate the value.The industry has made use of traditional models;however these models do not account for flexibility in property.This article uses income and real options valuations to capture values of South African REITs.The results illustrate that the real option valuation produces a higher value of property than the traditional models.The findings have shown that the traditional models undervalue the REITs.And these findings are consisted with prior studies done in different geographical markets.Finally,one recommends that the industry practitioners should adopt real option valuation in valuing real estate.展开更多
基金We are grateful to the comments of anonymous reviewers,and Tumellano Sebehela’s assistance and insightful comments that improved this article significantly.
文摘The valuation of real estate plays a major role in property market.In the valuation industry there are various models used to estimate the value.The industry has made use of traditional models;however these models do not account for flexibility in property.This article uses income and real options valuations to capture values of South African REITs.The results illustrate that the real option valuation produces a higher value of property than the traditional models.The findings have shown that the traditional models undervalue the REITs.And these findings are consisted with prior studies done in different geographical markets.Finally,one recommends that the industry practitioners should adopt real option valuation in valuing real estate.
