Valuation

ESTON is carrying out the REIT evaluation of Graphisoft Park

The ESTON International team has reached outstanding success during its 25 years’ of operation not only in  the field of property leasing, office fit-out and project management but also in property valuation, where we managed to obtain many satisfied clients. This year our portfolio grew by a REIT evaluation, since ESTON became the official property valuator of Graphisoft Park since January 2018. 

Our regular clients include banks and real estate funds among others – such as Erste Open-ended Property Investment Fund – for whom we carry out legal expert reports and technical control service in banks. Our leading consultants are RICS (Royal Institution of Chartered Surveyors) members, thanks to whom our portfolio expanded by a special assignment, the REIT evaluation of Graphisoft Park.

SZIT (or Real Estate Investment Trust (REIT)) is a special form of enterprise, which was acknowledged by Hungarian regulations in 2011 when law number CII was declared.  SZIT is the Hungarian equivalent of REIT, which started in the US in the 60’s and has become widespread in Europe by now, has many advantages from taxation point of view. It is still a rare form of enterprise in Hungary, so we are very proud that ESTON can carry out the SZIT (REIT) valuation of Graphisoft Park.

The building of the office park was appreciated from the start because they utilised an old industrial site this way saving it from becoming a ghost town. Graphisoft Park lies on nearly 18 hectars of the total territory of Óbudai Gázgyár (Gas factory of Óbuda), comprising 14 office buildings of different sizes since the start of the property developments in 1998. Among the tenants we can find several information technology companies, such as Graphisoft, Microsoft or SAP Hungary Ltd. Furthermore renowned technological and pharmaceutical companies, such as Servier Research Zrt. or ThalesNano Nano-technological Research-Development Zrt. have their offices and laboratories here.

Developments with educational purposes are of significant importance in the life of Graphisoft Park. Aquincum Institute of Technology (AIT-Budapest) designs courses for students coming here for a semester from the best universities in the world, in addition the institute provides an excellent training opportunity for researchers of companies. The other higher educational institution is IBS (established in 1991), International Business School, which is recognised in the region and has been accredited several times. This university operates in more countries and is designed for students who are interested in business and management studies. Its mission is to provide culturally and economically significant education in English language in the field of business and management.

Development does not stop here. At present an office area of 12,500 square metres comprising four office buildings and underground garage with 450 park places are being built. As a result of the development Graphisoft Park will have 73 thousand square metres of office, laboratory and education area, which are sought after in the current almost complete occupancy rate.

ESTON’s valuation team did technical expertise assignments for Graphisoft Park in the past, but now we can contribute even better to the flourishing of the office park, as we prepare the regular valuation of the Park since the year of 2018.

Mr. Adorján Salamon, Managing Director of ESTON said about the project the company has won: “It is of utmost importance for us to meet the market requirements and to satisfy our Clients’ needs. This is why we are very proud that we could win a valuation project of great importance such as this one. I would like to congratulate the ESTON valuation team for their performance, since this success is owed to their hard work and commitment.”

Eston started new service: Technical Inspection

Responding to client demand Eston International decided to further extend the scope of its professional consultancy services by Technical Inspection

Eston International has started its new service covering project follow-up & technical inspection. This includes local supervision as regular as stipulated in the loan agreement during the building process; technical and financial statements within the scope of project financial tracking and technical inspection services without limit of value throughout the country. Martonosi E

Technical inspection process starts with an initial report prior to the first loan instalment, to supervise and ensure that all the relating conditions are met and the signed contract is adequate. Following that, reports are prepared every month, during which all further withdrawals can be approved based on the local inspection and the obtained documentation (mostly invoices).

After the finishing construction phase, a final report is to verify that the project was completed according to the preliminary schedule, budget and technical specification.

Éva Martonosi, chief executive of the new technical inspection service field and head of Eston’s Valuation division stated: “I am delighted to have been given the opportunity to fulfil the arising market needs, and beyond our regular services we are able to provide a new one from now on. The technical inspector actively participates in the construction process already from phase zero and gives his/her best to the success of the investment or development which means a warranty for both (contractor and creditor) parties.â€?

Eston International Property Advisors, present on the market since 1993, considers the technical inspection field as a new challenge, which has already increased the company’s assignment portfolio with orders worth several billion forints since the beginning of the year.

You can read further information about Eston Valuation Division here.

Eston Valuation Division expanded

Eston International’s Valuation Division, having acted on the Hungarian property market for already more than 10 years and being awarded several times, has recently expanded with two more colleagues: Csepiné Preiner Mária joined the group as senior valuator, whereas Máté Veronika as general assistant.

The expansion was induced by several reasons: during last year the valuation division of the company performed excellently regarding both the successfully completed assignments and the efficiency in customer service without expanding the former team. On top: on a yearly basis, the number of Eston valuation reports doubled.

As main development of 2007, our company broadened the scope of its high standard services: we undertake forensic reports as well.

This team expansion of Eston contributes to an even higher client service and our partners’ satisfaction is justified by the fact that they regularly recommend our services to other enterprises.

Background information:
Both in 2006 and 2004 Eston Valuation Division won the professional prize ‘Real Estate Brokerage of the Year’ by the Hungarian Real Estate Association in valuation category.
Eston is the official valuator of the biggest Hungarian real estate fund: ERSTE Property Fund (ERSTE net asset value is worth more than 148 billion HUF).

Head of Eston’s valuation team appointed as forensic expert

Eston International proudly announces that head of its Valuation Department, Ms. Éva Martonosi has recently been appointed a forensic expert.

Her appointment can be seen as the highest level recognition of her almost 20-year professional experience and competence. Éva has been leading Eston’s valuation division for two and a half years, during which time her team was twice awarded „Best Real Estate Valuator of the Yearâ€?. Following her appointment not only Eston’s clients, but participants of selected suit cases can be helped by Éva’s high quality expert opinions.
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ESTON International, was honoured the title „Best Real Estate Valuator of the Year 2006â€? with which ESTON gave evidence for its professional competence for the second time on the field of real estate valuation.

Real (estate) values – Objectivity in the light of property taxation

There is much uncertainty around the planned property tax: when and how will it be put into practice? To whom will it apply? And what will it be based on? In the case of residential properties, there are numerous potential factors upon which to base the tax, such as zoning or square meterage. But if the new tax will also apply to commercial properties, there will be a great need for more efficient, uniform, and reliable valuation, conditions that are not at the moment ensured, according to Eva Martonosi, head of the Valuation Division at Eston International.

Today, most of the demand for valuation services comes from commercial banks and bank clients that are seeking credit. It is in the basic interest of both the bank and the client that the estimated value of the real estate reflects real market circumstances. To substantiate their estimates, commercial bank appraisals need an external expert’s unbiased opinion based on essentially the same information, since hard data are often not available.
However, if the aim of the valuation is setting a tax base, new interests enter the picture. Until now, clients preferred optimistic valuations to support their financing needs, but the implementation of the property tax should raise the “demandâ€? for more modest estimates.
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Locked information
Thanks to the huge volume of property transactions and the easily available supply information provided by the Internet, the residential market is sufficiently transparent. However, only a small fraction of such information can be collected about non-residential, high-value commercial properties. It is only a slight exaggeration to say that the only thing known for certain about this segment is that transactions do occur.
Of course, real estate professionals involved in the mediation of these transactions hold reliable information about properties sold. Although they keep trade secrets, their market experience means they understand the key fixed points upon which valuations can be built. Thanks to the so called “glass pocketâ€? programme for transparent public administration, more and more municipalities are providing details regarding their real estate transactions in their annual reports. It requires a great deal of luck and even more patience to peruse the report appendices and dig up the relevant data for development sites, but there are precious few other fixed points to build on.

At first glance, using data from the Duty Office would appear to be a viable option. Unfortunately, this is not the case in Hungary, since this data is currently not publicly available, nor is it accessible for appraisals. One wonders exactly whose rights are being protected in this way.
Even if such data were available, it is by no means certain that it would be of great use. In our experience, when Eston was able to collect some data from this source thanks to our professional connections, the data analysis system used by the Office did not provide information relevant to appraisals. On occasion, it was not even clear if there was building on a given site or not. Even more troubling, the data received by the Office do not reflect actual market tendencies, since most commercial properties are sold as business entities in order to avoid the 10% duty on commercial property transactions.

Puzzling abundance
Interesting situations arise not only from the lack of information; further complications also occur when owners willingly provide draft or even signed contracts together with the required documentation. Appraisers must decide whether to take into account the price included in these.
The situation is less complicated on the easily-typified residential property market. The transparency of this segment makes judging the validity of a contract easier. If a contract appears to be actual, (i.e., the contracted price is line with the value suggested by comparison with a thoroughly selected peer group), the appraisal should regard it as valid. In such cases, a review isn’t really justified, neither professionally nor ethically. But if the indicated value is not in line with peer data, then the contract, which was welcome at first, becomes a source of confusion. However, it is possible that a reasonable explanation for the difference may emerge during further reconciliation.

In the case of appraisals submitted for the financing of development properties on the commercial property market, especially from developers and prepared for commercial banks, the appraiser may discover that, according to a given contract, a property was purchased at a price that is low in light of comparable data. Since appraisers act in good faith, they are willing to use the contracted price unless it contradicts the data of peer group valuation. If this is the case, appraisers can set an estimated value higher than the contracted amount, provided that they can prove that the deal did not satisfy the TEGoVA definition of a market transaction, meaning that the seller was not fully aware of the potential development options, or that the buyer had already taken steps for more effective usage of the property before signing the contract.

A feasible path
Appraisals in this data-poor market tend to use methods based on yield. This uses the more readily-available data of the rental market, and gives a more reliable value. Rental rates are more transparent than the purchase price in sales transactions. More data is available for the rental market compared to the sales market, both in itself and in a market context. Unfortunately, this growing market is also beginning to see an increase in surprising rental contracts for the overly “cleverâ€? appraisals, which are hard to fit with actual market evidence and can’t easily form the basis of a correct analysis.
Eston’s Valuation Division believes that in order to achieve the government’s goals and in the interest of all affected parties, the current uncertainties, stemming mostly from unreliable or unavailable data sources, should be diminished. “Give me a place to stand on”, said Archimedes, “and I will move the earth.” Appraisals may need more than one point to stand on, or at the very least, clear and available data, to increase the consistency of valuations.
As opposed to the sale of properties themselves, the sale of business shares became common due to the relatively high, 10% duty. Lowering this duty will hopefully be part of the agenda soon. If not, and if the current, none-too-favourable regulations are maintained, the central budget will lose substantial income, and the entire economy will suffer from a lack of transparent transactions. We would also like to see more open access to Duty Office data, undistorted by duty-avoiding contracts and structured in a way that takes the information requirements of appraisals into account. This would trigger a clarifying process that could ripple throughout the economy, and result in a substantial increase in the credibility of real estate valuation.

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ESTON International, was honoured the title „Best Real Estate Valuator of the Year 2006â€? with which ESTON gave evidence for its professional competence for the second time on the field of real estate valuation.

The analysis has been published in the freshest issue of Property Watch.

Valuators awarded again – ESTON International has been awarded as Best Real Estate Valuator of the Year 2006

MAISZ (Hungarian Real Estate Association) handed over the „Real Estate Professionalâ€? awards this weekend. ESTON International, the well-known commercial property advisor was honoured the title „Best Real Estate Valuator of the Year 2006â€? with which ESTON gave evidence for its professional competence for the second time on the field of real estate valuation.

ESTON International’s Valuation Division has been offering valuation services for already 8 years to its clients especially on sales and purchase transactions, acquisitions, property financing and portfolio management. Their continuous success is ensured by acknowledged clients such as ORCO Group, Auchan Hungary Ltd., MOL, Magyar Villamos Művek, or Antenna Hungária Inc. As their most significant merit, the Valuation Division was chosen as official valuator for ERSTE Investment Fund (dealing with net assets worth 130 billion HUF) in 2004.
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Éva Martonosi, head of the Valuation Division summarizes their key to success as follows: „We truly believe in the synergy of professionalism and personal care. Our commitment is supported not only by our adequacy to TEGOVA but also to our own strict quality assurance system. ESTON was the first agency to obtain ISO certificate which also contributes to our permanent high-quality service. As an addition, the education of our colleagues is also of high importance; our senior consultants possess master degree in property advisory, accredited by RICS. We are proud that we managed to increase the team’s efficiency: the turnover has risen by 35% in 2006 in comparison to the previous year.â€?

Éva Martonosi rendered thanks to their clients for their continuous trust, to the committee for the award and to her colleagues for their dedicated work.

ESTON International doubled its performance by applying its professional skills to real estate assets worth more than 250 billion HUF in 2006. The company is looking forward to this year with confidence.

How much is your property worth? (Part 2)

When is it worthwhile to have your property assessed? What makes a good assessment from a professional perspective? If you’ve found yourself pondering these questions as either a property owner or a potential buyer, then you may find a few of points of interests in the following short synopsis.

How can we evaluate a property assessment?
When you request an assessment, the first thing to define is the purpose of the assessment, since the values obtained with assessments for different possible purposes can vary greatly. We can approach this question from two directions: what do we intend to use the valuation for, on the one hand, and in which cases does a given method provide accurate and usable information, on the other hand.

First, we should investigate what the different assessment methods mean and where they can be used.

The most important assessment methods are as follows:

1.) assessments based on market value, such as
a. income approach (yield-based) valuation
b. turnover approach (comparative) valuation
2.) cost-based valuation

A YIELD-BASED VALUATION, to put it simply, calculates the value of an asset on the basis of profits earned with that asset, that is, it provides an accurate figure first of all in the case of income-generating properties, where the main characteristic is the “money-making ability”. Typically, these are residential properties, retail outlets, hotels, or offices that are rented or easy to rent out, as well as any property likely to generate long-term and permanent cash inflow.

In a TURNOVER-BASED VALUATION, we analyze properties that were recently sold or offered for sale on the real estate market, and we compare these with the property subject to the valuation. In the valuation of plots of land, as well as buildings the turnover-based approach provides a more accurate value.

A COST-BASED VALUATION essentially means that a cautious buyer will not pay more for the property than its production costs. In general, this method provides the most reliable value in the assessment of newly-built or special-purpose properties. A special-purpose property can be, for instance, a hospital or a church, where neither a comparison nor the analysis of the income-generation ability are applicable. At the same time, the value obtained this way has the least to do with market transactions, therefore, one should handle this method and the interpretation of the value thus obtained with particular care.

A valuation is probably most accurate when it provides almost identical values when carried out using all three methods. A frequent mistake occurs when the values are simply weighted in the case of vastly divergent valuations, giving an average that has little to do with the judgement by the market. Therefore, we should take care not to use a method that is likely to distort the value. For instance, in the case of a property to be operated as a kindergarten, it does not make sense to use an income-based valuation, but even the turnover approach is difficult to interpret. If, in such a case, we produced all three values and determine an estimated value by weighting, we would have a mathematically provable value, though one that is potentially quite far from reality due to the fact that we had applied weight to a value not taken into consideration by the market during the sale.

Upon knowing the various methods, we can assign an appropriate one to the given purpose of the valuation. Based on property usage, a distinction can be made among the following major assessment purposes:

1) sale
2) purchase
3) loan security
4) accounting considerations
5) other information-gathering (e.g. for rental or for strategic decisions).

Compulsory content requirements
Finally, one more important consideration: what is the minimum that a valuation must contain?

It is very important to ensure that a valuation provides information for the outsider that enables its verification and safe acceptance. Different instances prescribe many different things as content requirements. The following is a list of the minimum requirements without which a valuation shall not be accepted:

  • Exact identification of the Client and of the Agent.
  • Determination of the purpose of the valuation.
  • Date and period of validity of the valuation.
  • Data, documents used.
  • Description of the methods applied.
  • Data of the land register, identification of any unsolved issues.
  • Location of the property, its characteristics, available utilities.
  • Technical description, status of the buildings and erections.
  • Comparative data.
  • Value-modifying factors.
  • The result of the valuation, itemised valuation.
  • Any disclaimers, certificate.
  • As an annex: the title page from the land registry, the plotting diagram, the contracts affecting the value, blueprints, photos.

Of course, it can happen that not all of the above can be collected, but the valuation in such a case must disclose the reason for any missing items and also cover the issue of how far this might affect the value. Armed with the above information, (though this article by no means covers all there is to know), even a layman can judge the acceptability of a valuation to a certain extent.

Mikor érdemes értékbecslést kérni?

VILÁGGAZDASÁG / Manapság a legtöbb vállalkozás akkor készít értékelést, ha valamilyen külső okból, vagy kényszerítő körülmény miatt muszáj. Kényszerítő erő lehet például hitelfelvétel esetén a bank, számviteli átértékelés esetén a könyvvizsgáló. Kevésbé jellemző, hogy azért kérjenek értékbecslést, mert valójában tudni szeretnék az adott ingatlan pontos értékét. Pedig tipikus, hogy a vállalat teljes vagyonának döntő részét adja az ingatlan (illetve az eszközök) értéke.

Könnyű belátni, hogy stratégiai döntések meghozatalakor egy nem valós eszközértékre alapozott elhatározás jelentős károkat okozhat. Például egy az értéken alul eladott ingatlan nemcsak kevesebb bevételt hoz, de az értékesítési bevételre alapozott befektetések realizálásának lehetőségét is korlátozhatja. Ugyanakkor a jóval a reális piaci érték fölött meghirdetett ingatlan esetében az eladás sikertelensége, illetve elhúzódása szintén kedvezőtlenül hat a tervezett befektetésre – fejtette ki Martonosi Ferenc, az Eston International üzletágvezetője.

Gyakran hangzik el: azért nincs igény értékelői szakvélemény megrendelésére, mert az adott cégnek saját szakemberei vannak, akikkel szemben jogos elvárás, hogy tisztában legyenek az ingatlanok értékével. Ugyanakkor a saját állományban lévő ingatlanos kollégák legtöbbször nem állapíthatják meg az ingatlanok reális piaci árát, hiszen nem függetlenek, az ingatlanokat jellemzően az eszközök műszaki, illetve használati értéke alapján minősítik, továbbá ritkán vannak birtokában a valós érték megadásához elengedhetetlen piaci rálátásnak, adatoknak vagy értékesítési tapasztalatnak. A szakmailag megbízható értékelők mindegyike több száz ingatlant tartalmazó értékadatbázissal rendelkezik, munkájukat gyakran az adott cég értékesítői tevékenysége támogatja. A leírtak alapján érthető, miért tér el sok esetben jelentősen az ingatlan tulajdonosa által várt és a professzionális értékelő által meghatározott ingatlan értéke.

Megéri tehát egy független szakértőt megbízni a vállalat eszközeinek értékbecslésével és azok folyamatos karbantartásával. Mindezen előnyökön túl az adott pillanatban felmerülő konkrét értékelési igények (pl. hitelfedezet) is gyorsabban és kisebb költséggel oldhatók meg. A piaci verseny miatt az értékeléseket felhasználók fontos elvárása, hogy minél rövidebb idő alatt és a lehető legalacsonyabb áron készüljön el a becslés. Ez a két elvárás együttesen viszont rontja az elkészített értékelések szakmai szintjét, megbízhatóságát. A szakértő felhívta a figyelmet: a megbízók sokszor nem a szakmai elismertség (minőség) alapján választanak becslőt, elsődlegesen az ár, illetve az számít, hogy a hitelhez szükséges értéket írja le. Ebből adódóan sok olyan “értékelő” van a piacon (és a banki listákon is), akik szakmailag nem megfelelő értékeléseket készítenek.

Értékelték az értékelőket

A Magyar Ingatlanszövetség (MAISZ) idén is átadta az „Év Ingatlanosa” szakmai díjat, többek között az ingatlanértékelői kategóriában. Az ESTON International Rt-t eddig főként a kereskedelmi ingatlanok sikeres forgalmazójaként ismerhettük, a megtisztelő ‘Év Ingatlanértékelője’ cím elnyerésével a cég a tanácsadói pályán is bizonyította rátermettségét.

Az ESTON International értékbecslésekkel öt éve segíti ügyfeleit ingatlanokhoz kapcsolódó tevékenységükben, így különösen adásvételi ügyletek, cégfelvásárlások, finanszírozási és portfoliókezelési kérdések megoldásában. A vállalkozás sikerességét olyan neves megbízók rendszeres felkérései mutatják, mint például a Fővárosi Vízművek Rt., a Magyar Posta Rt. vagy a Matáv Rt.

A komoly szakmai kihívásokkal is megbirkózó üzletág legnagyobb eredményének egy 2004-es megbízását tekinti, az adott évtől az ESTON International az ERSTE Befektetési Alapkezelő hivatalos értékbecslője. Martonosi Ferenc – aki kimagasló szakmai munkájáért a Cerean 10. évfordulója alkalmából a MAISZ oklevelét is elnyerte – a következők szerint foglalja össze az általa vezetett értékbecslési divízió sikerének titkát: „Az ESTON munkatársaiként hiszünk a minőségben. Elkötelezettségünket alátámasztja, hogy megbízásaink teljesítésekor nem csak a TEGOVA előírásainak, de saját, szigorú minőségbiztosítási előírásainknak (ISO) is megfelelünk. Emellett nagy hangsúlyt fektetünk munkatársaink szakképzettségének biztosítására is, vezető tanácsadóink RICS által elfogadott ingatlanszakértői diplomával is rendelkeznek.”

A 2004. Év Ingatlanértékelője díj elnyerése kapcsán Martonosi köszönetét fejezte ki a cég megrendelőinek az együttműködésbe fektetett bizalomért, a pályázatot bíráló bizottságnak az elismerésért, valamint kollégáinak az odaadó, minőségi munkavégzésért. Az ESTON International tanácsadói szolgáltatásairól várhatóan a jövőben is sokat hallunk: a cég tavaly több mint 126 milliárd forintnyi ingatlanportfolióra vonatkozóan készített szakértői értékelést.