Sustainability and ESG in commercial property valuation and strategic advice 3rd ed

6 Basis of value

The most common instruction for valuations is on the basis of fair value or market value. A client may also instruct a valuation on the basis of investment value (worth) in order to make decisions related to the value of an asset for their specific needs.

Sustainability and ESG factors may be of varying levels of interest to valuation stakeholders subject to their own requirements, those of other relevant market participants, and regulation and statute relevant to the jurisdiction. Market value may not be reflective of an individual client's requirements or sustainability needs; these may instead reflect investment value or worth - although this should not be assumed to be the case, with sustainability and ESG a key concern across markets.

Terms of engagement and agreed assumptions and special assumptions should be appropriate to the valuation purpose and basis. Where a valuer is providing a valuation on the basis of investment value (worth), factors not yet reflected in market value but that may influence an investor's decision-making may be considered.