Measurement and Valuation Flashcards

Under the RICS Code of Measuring Practice (6th Edition), what does 'GIA' stand for?

Answer: Gross Internal Area

GIA stands for Gross Internal Area, which is the area of a building measured to the internal face of the perimeter walls at each floor level, including internal walls and partitions.

Which of the five methods of valuation is most commonly used for standard residential properties in the UK?

Answer: Comparison method

The comparison method (or comparative method) is the most commonly used approach for valuing standard residential properties, using evidence from recent comparable sales.

In the RICS Red Book, what does the term 'Market Value' represent?

Answer: The estimated amount for which an asset should exchange on the valuation date between a willing buyer and seller in an arm's-length transaction

Market Value is defined as 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.

What is a 'yield' in property investment valuation?

Answer: The relationship between income and capital value, usually expressed as a percentage

A yield expresses the relationship between the rental income and the capital value of a property as a percentage, reflecting the return an investor receives relative to the price paid.

What does 'NIA' measure in commercial property?

Answer: Net Internal Area

NIA stands for Net Internal Area, which is the usable area within a building, excluding common areas, lobbies, toilets, lift rooms, and other non-usable spaces.

Which valuation method would typically be used to value a hotel or petrol station?

Answer: Profits method

The profits method (or accounts method) is used for properties where value is derived from the business carried on, such as hotels, pubs, and petrol stations, using trading accounts.