Valuers ‘must be prepared for new business models’
NEW business models like real estate investment trusts (Reits) are posing new challenges that the valuation industry must be flexible enough to meet.
Reits were held up as a prime example yesterday by the Minister of State for Finance and Transport, Mrs Lim Hwee Hua, who said valuers would have to venture into the realm of finance in order to tap the fast-growing sector.
Mrs Lim told the Asean Valuers Association (AVA) Congress that industry professionals will need a better understanding of the complex
real estate transactions and the underlying business model that property trusts employ.
Reits have become one of the most successful business models that have developed in recent years, with the Asian sector hitting a market capitalisation of about US$31 billion (S$49.4 billion) by the end of last year.
The Singapore Government has also promoted Reits through revised regulations and tax incentives, helping the country become a regional leader.
It has meant opportunities - and challenges - for valuers.
‘As new business models emerge in the real estate sector and advancements are made in technology, valuers must be prepared to exploit the latest technological advancements and improvements in financial modelling to offer new business solutions,’ said Mrs Lim.
She gave the opening address at the congress, which has attracted about 150 valuers from across the region.
She said the growth of Reits and the influx of foreign investment into the region have also meant an increase in cross-border real estate investments.
‘This means Singaporean and Asean valuers will increasingly have the opportunity to conduct valuations beyond their traditional domestic markets,’ said Mrs Lim.
She added that exploiting such cross-border opportunities would require valuers to keep up with new developments in Asia and the issues that will affect the property valuation, such as changes in legal frameworks and even specific political events.
As well, industry associations like the AVA and the Singapore Institute of Surveyors and Valuers, which organised the three-day event, must organise more training courses to raise the level of professionalism in the industry, she added.
Source : Straits Times - 4 July 2006
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