Registered Valuers, Estate Agents, Property Managers & Consultants

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Reeland Realty Limited is a real estate professional limited liability company incorporated in Kenya. The company specializes on property valuations, management and estate agency, project appraisal and real estate consultancy services.

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Valuation Services

 

We provide accurate, reliable, and compliant valuation services tailored to meet the requirements of financial institutions, investors, corporations, government agencies, and private clients. We are experienced in providing valuation services for advisory, audit and book keeping, court bonds, mortgage, insurance, debentures, sales, rating, rental assessment, rating and liquidation amongst others. We provide the valuation services for real estate, busines and company (going concern) and movable assets.

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  • Bases and Premises of Valuation:

These are based on the International Valuation Standards (IVS), 2020.

Bases of Valuation

IVS, 2020 defines basis of value as a statement of the fundamental measurement assumptions of a valuation. Basis of value describes the fundamental premises on which the reported values are based. The basis of value may influence or dictate the selection of valuation methods, inputs and assumptions and the ultimate opinion of value. IVS lists the following us main bases of value.

  1. Market Value: This is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

  2. Market Rent: This is the estimated amount for which an interest in real property should be leased on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

  3. Investment Value (or Worth): This is the value of an asset to the owner or a prospective owner for individual investment or operational objectives.

  4. Synergistic Value: This is the result of a combination of two or more assets or interests where the combined value is more than the sum of the separate values.

  5. Equitable Value: This is the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties.

  6. Liquidation Value: This is the amount that would be realised when an asset or group of assets are sold on a piecemeal basis.

NB: Insurable Value is not listed by IVS as a basis of value. However, The Kenya Standards of Valuation 2021 provides for Insurable Value and defines it as the sum stated in the insurance contract applying to a property as the liability of the insurer should damage and financial loss be caused to the insured by a risk specified in the insurance contract occurring to that property. Insurable Value considers the total cost of rebuilding/replacement together with additional factors as appropriate.


 

Premises of Valuation:

IVS, 2020 defines premise of value as the circumstances of how an asset or liability is used. Different bases of value may require a particular premise of value or allow the consideration of multiple premises of value. IVS lists the following us main premises of value:-

  1. Highest and Best Use: This is the reasonably probable and legal use of property that is physically possible, appropriately supported, and financially feasible, and that results in the highest value.

  2. Current Use/Existing Use: This is the current way an asset, liability or group of assets and/or liabilities is used. 

  3. Orderly Liquidation: This describes the value of a group of assets that could be realised in a liquidation sale, given a reasonable period of time to find a purchaser, with the seller being compelled to sell on as-is, where-is basis.

  4. Forced Sale: Forced sale is often used in circumstances where a seller is under compulsion to sell and that, as a consequence, a proper marketing period is not possible and buyers may not be able to undertake adequate due diligence. It’s worth noting that a forced sale is a description of the situation under which the exchange takes place, and not a distinct basis of value. While a valuer can assist in determining a price that should be accepted in forced sale circumstances, this is a commercial judgement and is not a valuation that can be determined in advance, but a hypothetical figure that might be seen as a reflection worth to the particular vendor at the particular point in time having regard to the specific context. The Land Act 2012 Sec.97 of the Laws of Kenya refer to this price in forced sale circumstances as the Reserve Price and set it to be at least 75% of the market value.

  • Valuation Methodology/Approach for Real Estate & Movable Assets:

  1. market approach, 

The market approach provides an indication of value by comparing by comparing the subject property with identical or similar assets for which price information is available, such as comparison with market transactions in the same, or closely similar, type of property within an appropriate time horizon.

  1. Income Approach

The income approach provides an indication of value by converting future cash flow to a single current value. Under this approach the net value of income, cash flow or cost savings generated by the property are capitalized (multiplied) in perpetuity to arrive at the market value of the property.

  1. Cost Approach

The cost approach provides an indication of value using the economic principle that a buyer will pay no more for a property than the cost of obtaining a property of equal utility, whether by purchase or by construction, unless undue time, inconvenience, risk or other factors are involved. The approach provides an indication of value by calculating the summation of the value of land and the current replacement or reproduction cost of a property and making deductions for physical deterioration and all other relevant forms of obsolescence. the assessment of the value of the land is based on direct comparison of sales of vacant land/development sites in the subject’s area.

It is worth noting that valuation of the commercial properties would include the electro mechanical equipment that are parts and parcels of the buildings. The buildings cannot operate without these facilities like lifts and water pumps while air conditioners and generators are also deemed to be necessities under certain conditions. While their values can be given separately, the buildings cannot be valued excluding these items. A normal valuation inspection of these items will be undertaken alongside the building’s inspection and comments on their conditions included in the valuation report.

Valuation Methodology/Approach for Going Concerns:

  1. Discounted Cash Flow (DCF)
  2. Asset-Based Valuation
  3. Market Approach (Comparable Transactions)
  4. Earnings Multiples

We provide professional valuations of real estate properties, movable assets and business enterprises/companies.