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Valuing the client or the property?

This thesis provides an examination of judgement autonomy of Dutch commercial real estate valuers in relation to client orientation. The valuation of commercial real estate such as offices or retail properties requires in-depth analysis due to its uniqueness by location, building type and usage details. Essentially, a register-valuer is qualified and instructed to assess a property value to one’s best cognitive effort and inform others of this outcome by means of a valuation report. In the Netherlands, concerns over independence risks and client-related judgement risks of valuers have been raised by regulative authorities as the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). A significant part of these concerns followed the 2008 financial crisis, which appeared to be at least partially driven by unreliable and incomparable valuations of Dutch commercial real estate (AFM, 2014; DNB, 2012; 2015). Among other things, these concerns led to the instigation of the Nederlands Register Vastgoed Taxateurs (NRVT) in 2015. NRVT is a new Dutch central register of valuation practitioners set up in order to improve self-regulation, quality control and compliance of valuation practitioners. Currently, the chamber for commercial real estate valuation holds about 2,000 commercial valuation registrations (NRVT, 2020). The introduction of NRVT, and other measures taken, reflect an instrumental view towards enhancing professionalism of Dutch valuers. This view is based on a systematic orientation to professional conduct in which good practice is primarily objectively determined (Van Ewijk, 2019). However, Wassink and Bakker (2016) point out that individuals make personal choices in order to deal with work complexity. Insight into and reflection on individual choices is part of what is referred to as normative aspects of professionalisation: what norms prevail in individual judgement and decision-making and why (Van Ewijk, 2019). In this regard, insight into judgement reasoning of valuation practitioners may contribute to normative levels of professional development of valuers. The need for such is expressed through community concerns over how individual judgement autonomy may become subdued due to instrumental-driven developments taking place in the sector. The combination of authoritative concerns over professional quality in the Netherlands and lack of (scientific) insight on how client influence affects judgement in valuation practice poses a problem: How may practitioners address client-related judgement bias risks and improve valuation accuracy from this viewpoint, if little is known on how such risks may occur in daily practice? The seemingly scarce scientific insights available in this regard in the Netherlands may also prevent educational programs to adequately address valuer independence and objectivity risks in relevant training programs. In order to address this knowledge gap, the present PhD research examines the following research problem: 169 Summary “How does client orientation affect professional judgement autonomy of commercial real estate valuers in the Netherlands?” The term ‘client orientation’ should be broadly interpreted and may refer to valuers’ perception, understanding and meaning given to alleged, actual or anticipated client-related aspects. Information on such client aspects is not required for the performance of valuation instructions. It should also be noted that this research examines the context of how client orientation may affect valuer judgement reasoning patterns during work practice, yet not its effect in terms of decision on final value opinion.

Complexity in valuation practice

The aim of this paper is to examine valuer judgement behaviour, by exploring the manifestation of task complexity in Dutch commercial valuation practice. For this purpose, we adopted a grounded theory approach and undertook 18 in-depth interviews with senior valuation professionals across the Netherlands. Our findings indicate a strong presence of situational task complexity in commercial valuation practice, as professionals operating in large valuation teams perceive different elements of task complexity throughout commercial valuation practice in comparison to peers working in small valuation teams or self-employed valuers. Further, coping strategies used to deal with task complexity vary substantially by type of valuer as well. From our data, we deducted three types of task environment constructs in which valuers operate, which basically represent the various levels of professional standards required by clients as well as organisational settings composed to meet client standards. As such, we found that task environment settings strongly coincide with perceptions of task complexity. The presence of situational task complexity in commercial real estate valuation practice points to the need for customisation of professional valuer’s development programs to facilitate valuers to deal with task complexity in different stages of valuation practice and hence contribute to advancing valuer judgement skills.

Nature, natural resources and valuation in the Anthropocene

Biodiversity, including entire habitats and ecosystems, is recognized to be of great social and economic value. Conserving biodiversity has therefore become a task of international NGO’s as well as grass-roots organisations. The ‘classical’ model of conservation has been characterised by creation of designated nature areas to allow biodiversity to recover from the effects of human activities. Typically, such areas prohibit entry other than through commercial ecotourism or necessary monitoring activities, but also often involve commodification nature. This classical conservation model has been criticized for limiting valuation of nature to its commercial worth and for being insensitive to local communities. Simultaneously, ‘new conservation’ approaches have emerged. Propagating openness of conservation approaches, ‘new conservation’ has counteracted the calls for strict measures of biodiversity protection as the only means of protecting biodiversity. In turn, the ’new conservation’ was criticised for being inadequate in protecting those species that are not instrumental for human welfare. The aim of this article is to inquire whether sustainable future for non-humans can be achieved based on commodification of nature and/or upon open approaches to conservation. It is argued that while economic development does not necessarily lead to greater environmental protection, strict regulation combined with economic interests can be effective. Thus, economic approaches by mainstream conservation institutions cannot be easily dismissed. However, ‘new conservation’ can also be useful in opening up alternatives, such as care-based and spiritual approaches to valuation of nature. Complementary to market-based approaches to conservation, alternative ontologies of the human development as empathic beings embedded in intimate ethical relations with non-humans are proposed. https://www.linkedin.com/in/helenkopnina/

Sustainable strategies for heritage; towards a holistic valuation framework

Cultural heritage buildings and sites are threatened by the effects of climate change, especially in coastal zones. Risks not only include floods and submersion, but also less visible risks such as effects of moisture levels or, alternatively, drought. At the same time, it is important to involve people in the care of heritage buildings and sites, to stimulate them to cherish, admire, and to enrich their lives with the heritage locations, buildings and stories.This paper aims to contribute to our knowledge on the application of valuation approaches. The topic of heritage and sustainability calls for an approach that encompasses a broad range of values. Theoretically, this paper relies on the approach of ‘Design for Values’. This approach starts with the identification of the values that are aspired to in a design project. These values are connected to norms, which describe how the identified value can be reached. On a more technical or concrete level, requirements are noted down, which specify the precise conditions a design must fulfill. In this way, a ‘value hierarchy’ can be outlined, which forms a guide for the designing process. In a value hierarchy, the levels are connected in two ways: downward by ‘specification’, and upwards, by the phrase ‘for the sake of’. After the design is finalized, a verification step is needed to ascertain if the aspired values indeed have been achieved in the design.The empirical case study for this paper is provided by the investigations of the Wisloujcsie Fortress and surrounding area at the SOS-workshop in Gdansk in October 2022. In our investigation of the site several problems and challenges came to light, which we summarized in a SWOT-analysis. For sustainable development of the area and the conservation of cultural and natural heritage we identified values connected to heritage, water, public access, and social values, see figure 1. In the paper, we will further elaborate on the norms and requirements that follow from each of these values. Also, we want to reflect on a preliminary verification step. We conclude that to produce designs that successfully achieve the climate and sustainability goals of the SOS-Climate Waterfront project, a ‘model valuation framework’ could be a useful guide for the design process. The first elements of such a framework are presented in our paper. Applying such a valuation framework stimulates ethical reflection during the design process and evaluation of the result. It thereby strengthens the connections between sustainability goals and urban design.

Ethics and behavioural theory

The role and ethics of professionals in business and economics have been questioned, especially after the financial crisis of 2008. Some suggest a reorientation using concepts such as craftsmanship. In this article, I will explore professional practices within the context of behavioural theory and business ethics. I suggest that scholars of behavioural theory need a strategy to deal with normative questions to meet their ambition of practical relevance. Evidence-based management (EBMgt), a recent behavioural approach, may assist business ethics scholars in understanding how professionals infer ‘evidence’ to make decisions. For a professional, ethical issues are an integral part of decision-making at critical moments. As reflective practitioners, they develop insights related to ethical concerns when collecting and assessing evidence within decision-making processes.

Valuation of real estate market values as an indicator