RICS must update its valuation methods if it wants to remain relevant - Giles Fuchs in Property Week

In a recent article with Property Week, Giles Fuchs, CEO and Co-Founder of Office Space in Town, discusses the need for RICS to formally recognise the flexible workspace industry.

As RICS announces an internal review of its practices to strengthen public trust, Giles makes the case that it is at risk of ignoring (and losing) the trust of the wider property industry by ignoring key growth sectors, including flexible workspace, which are in need of a recognised valuation formula.

Giles argues that certain sections of the property market are not given the recognition they need from RICS and the result is that many property owners, operators and investors have seen deals fall apart, causing huge frustration.

The lack of a standardised valuation formula for the flexible workspace sector of the market is worrying. While OSiT has secured funding due to strong relationships and transactional evidence, to make the sector more competitive overall and to attract new entrants to the market a standard valuation model is required.

Giles has his own “Fuchs Formula” for valuation, which splits the annual income generated by the flexible workspace centre into two or more tranches and applies a market yield to the first tranche up to ERV, with discounted yields applied to the outstanding income, based on its variable nature.

Across the property world new types of assets, spaces and services have sprung up, and will continue to emerge to meet the demands and requirements of the new world we live in. RICS needs to keep up with these developments and update its methodologies to keep pace.

Read Giles' full piece here.