This IPD Valuation Report is the most comprehensive statistical analysis of Valuation inputs and
assumptions available in South Africa. This analysis provides the aggregated market data for all direct property investments held in the IPD South African databank as at the end of December 2006. The data is collected from major institutional and listed property investors covering over 2478 properties with an overall capital value of R111bn. The analysis provides data by 19 different market segments across the Retail, Office, Industrial and Other sectors. The report contains commentary and analysis of the results.

The report focuses on the following key areas:

• Composition of the databank, disaggregated by valuation segment in terms of value and valuation method for in house and external valuations
• Valuation components based on the two main methods viz. Income Capitalisation and Discounted Cash Flow (DCF)
• Accuracy of valuations in the databank in comparison to transaction data
• Analysis of valuation levels examining relationships between key inputs and values e.g. vacancies, rental growth assumptions, capitalisation rate, discount rate etc.

The data measures include:

Comparison by market/valuation segment for:
- Capital value/m2
- Vacancy rates
- Operating costs/m2
- Gross income/m2
- Net income/m2

Input statistics and assumptions:
- Capitalisation rate % (IC Properties)
- Yield on first cash flow % (DCF Properties)
- Discount rate % (DCF Properties)
- Rental growth assumed %
- Operating cost inflation %
- DCF term
- Exit yields %