Publication Details |
Category | Text Publication |
Reference Category | Journals |
DOI | 10.3846/1648715X.2011.633771 |
Title (Primary) | Valuation of market uncertainties for contaminated land |
Author | Bartke, S. |
Source Titel | International Journal of Strategic Property Management |
Year | 2011 |
Department | OEKON |
Volume | 15 |
Issue | 4 |
Page From | 356 |
Page To | 378 |
Language | englisch |
Keywords | Real estate appraisal; Contaminated land; Valuation of perceived uncertainties; Stigma and marketability risk; Risk scoring methodThe revitalisation of contaminated land carries many risks and uncertainties. This paper aims to reveal drivers of risk perception and to introduce a novel valuation method for the assessment of market-perceived risks for sites polluted by earlier use in a transparent and comprehensible procedure. International approaches to account for value deductions due to contaminations and resulting uncertainties are reviewed. Based on the literature review and a national survey amongst German professional appraisers, a risk assessment methodology is elaborated, outlined and applied in a case study approach. We find that areas that have been properly decontaminated on average still have a depressed market value of 12.25%. Quantities such as location, time and feasibility of passing on risks can be combined in an algorithm to determine the absolute value reduction for a specific property to be appraised. Results should help appraisers, international investors and portfolio managers to deepen their understanding of valuation of risks associated with (previously) contaminated land. |
Abstract | The revitalisation of contaminated land carries many risks and uncertainties. This paper aims to reveal drivers of risk perception and to introduce a novel valuation method for the assessment of market-perceived risks for sites polluted by earlier use in a transparent and comprehensible procedure. International approaches to account for value deductions due to contaminations and resulting uncertainties are reviewed. Based on the literature review and a national survey amongst German professional appraisers, a risk assessment methodology is elaborated, outlined and applied in a case study approach. We find that areas that have been properly decontaminated on average still have a depressed market value of 12.25%. Quantities such as location, time and feasibility of passing on risks can be combined in an algorithm to determine the absolute value reduction for a specific property to be appraised. Results should help appraisers, international investors and portfolio managers to deepen their understanding of valuation of risks associated with (previously) contaminated land. |
Persistent UFZ Identifier | https://www.ufz.de/index.php?en=20939&ufzPublicationIdentifier=11704 |
Bartke, S. (2011): Valuation of market uncertainties for contaminated land Int. J. Strateg. Prop. Manag. 15 (4), 356 - 378 10.3846/1648715X.2011.633771 |