01 Market/ Comparison Approach Based on Malaysian Valuation Standard 6th Edition Group Members 1) Ahmad Zakry Bin Jemysemsuddin (2020982209) 2) Nor Alida bt Arsad (2020982407) 3) Muhammad Naim Aiman Bin Mohd Khairi (2020963395) 4) Nurul Athirah binti Osman (2018299674) 5) Nurul Nabilah Binti Ahmad Rizam (2020982191) 6) Sarah Aivee Binti Zaidi (2020977361) 02 Market/ Comparison Approach It can be either be a direct or indirect comparison by use of specific format or model such as land and building value split where the Valuer is expected to analyse and value the components separately, with the aim of the values for the separate components reflecting market derived rates when the end objective is Market Value. 03 (a) Provides an indication of value by comparing the asset/property with market evidences of identical or comparable (that is similar) assets/properties for which price information is available, such as a comparison with market transactions in the same, or closely similar, type of asset/property within an appropriate time horizon. (i) The subject asset/property has recently been sold in a transaction (ii) Actively publicly traded, and/or (iii) There are frequent and/or recent observable transactions of similar assets/properties. (b) When the criteria in (a) are not met, the following are additional circumstances where the market approach may be applied and afforded significant weight. (i) Transactions are not recent enough. (ii) Publicly traded but not actively. (iii) Comparable assets have significant differences (iv) Information on recent transactions is not reliable. (v) The critical element affecting the value of the asset/property is the price it would achieve in the market. 04 (c) (e) The heterogeneous nature of many assets/properties means that it is often not possible to find market evidence of transactions involving identical or similar assets/properties. Market evidence/comparables used in arriving at the value of the subject property must be stated in the Valuation Report. (d) (f) When comparable market information does not relate to the exact or substantially the same asset/ property, the Valuer must perform a comparative analysis of qualitative and quantitative similarities and dissimilarities between the comparable assets/properties and the subject asset/property. Market sales of comparable properties selected must be recent in relation to the valuation date. The comparable properties must also be of similar properties. Rely on local market evidences. If absence, rely on national market evidences. 05 (g) For each of the stated comparable sales, the minimum information required to be disclosed are the identification of the comparable (usually by way of Lot Number and or Title Number, Section/ Town/ City/ Mukim/ District/ State and full address (if available), the date of the transaction, the consideration for the transaction, a brief description of the property, title particulars such as tenure, land area, category of land use, express conditions, reserve (e.g. Malay Reserve), etc. Additional information that are useful include terms and conditions of the sale, specific physical disabilities, legal aspects, town planning details, names of the vendor and the purchaser, whether between related parties and whether under or over declared for specific reasons. (h) Other information regarding the comparable sales that may be provided are analyses in terms of value for the physical, legal, economic and other dissimilarities between the comparable properties and the subject property. Data used for this purpose must be adequate, verified and correctly analysed and must be disclosed to the Board in cases where there are complaints against the Valuer and the Board requests for the disclosure.. (i) In considering dissimilarities between the comparables chosen and the subject property, adjustments must be appropriate, logical, consistent and justifiable. 06 (j) (k) (l) The values derived after adjustments for dissimilarities should neither be averaged nor weighted to form the final value of the subject property. The Valuer should reconcile the adjusted values of the comparables and express his opinion of value on the most comparable adjusted value(s) and based on his professional judgement and experience. The Valuer may consider relevant sale and purchase agreements, options, offers and bids for the property being valued where such information is available. The Valuer shall have regard to and disclose any prior registered transaction of the property within two years of the valuation if it is ascertainable by way of a title search or otherwise. (m) (n) All comparables shall be adequately described. Where there is a lack of comparable market evidences, the Valuer shall state the extensiveness of his research, source of information, analysis and why the method is still being used. 05 Example: INFORMATION ABOUT THE PROPERTY TYPE OF PROPERTY : AGRICULTURE LAND STATE : PERAK DISTRICT : KINTA LOT NO : 56483 SIZE LOCATION : 9.1416 AC (398,555.31 SQFT) : FIRST LAYER REMARKS : VACANT LAND Comparison Details Property details Property Location Layer Property Type Land Area (sqft) Year Of Transaction Consideration Remarks Vendor Purchaser Analysis (RM/psqft) Subject Property Lot 56483 Kinta First Agriculture 398,555.31 2021 Vacant Comparable 1 Comparable 2 Comparable 3 Lot 10578 Lot 56483 Lot 11772 Kinta Kinta Kinta First First Second Agriculture Agriculture Agriculture 40,289.32 398,555.31 198,809.43 2018 2018 2018 1,588,000.00 7,300,000.00 2,178,000.00 Vacant Vacant Thong Kok Ying Harbhajan Singh Sdn A/L Lew Wei Yeap Bhd Mokand Singh Amusu MMC Golden Bukit Iswara Sdn Management Realty Bhd Services Sdn Bhd Sdn Bhd 39.41 18.32 10.96 Advertising Presentation | December 2020 02 C a l c u l a t i o n Subject Property Property Lot 56483 Location Kinta Layer First Property Type Agriculture Land Area (sqft) 398,555.31 Year Of Transaction 2021 Consideration Remarks Vacant Comparable 1 Lot 10578 Kinta First Agriculture 40,289.32 2018 1,588,000.00 Vacant Vendor Thong Kok Ying Sdn Bhd Amusu Management Services Sdn Bhd Purchaser Comparable 2 Lot 56483 Kinta First Agriculture 398,555.31 2018 7,300,000.00 Vacant Harbhajan Singh A/L Mokand Singh MMC Golden Realty Sdn Bhd Comparable 3 Lot 11772 Kinta Second Agriculture 198,809.43 2018 2,178,000.00 Lew Wei Yeap Bukit Iswara Sdn Bhd Analysis (RM/psqft) 39.41 18.32 10.96 Time Adjustment 15% 15% 15% Analysis (RM/psqft) 45.33 21.06 12.60 Other Adjustments Location Kinta/Hulu Kinta Layer First Accessability Size Total Adjustment Adjusted Land Value (RM/psqft) Land Value Comparable 1: Comparable 2: Comparable 3 Average Say Best Comp 0% 0% 0% -10% -10% 0% 0% 0% 0% 0% 0% 5% 5% -5% 5% 40.79 21.06 13.23 RM40.79 RM21.06 RM13.23 RM25.03 RM21.00 per sq. ft. per sq. ft. sq. feet RM21.00 Valuation 398,555.31 say RM8,369,661.53 RM 8,370,000.00
