Valuation concerns have been top of mind for most property investors for nearly two years. Property appraisals typically are based on a blend of three different valuation methodologies — discounted cashflow analysis, comparable sales and replacement value.

Inflation of materials and labour costs drove up replacement values as occupancy and rental rates were falling — and while carrying costs, particularly interest rates, were rising. Meanwhile, a corresponding decline in transaction volume undermined the ability of valuers to obtain sufficient data to derive meaningful comparable values.

While many managers employ the same few national valuation management companies to manage their appraisal processes, there is little consistency of approach between different investment managers’ valuation stances. Some have been marking their portfolio holdings down at an aggressive rate, while others have been much slower to take their marks — again, despite often employing t