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