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Review of Real Estate Investment Valuations

Review of Real Estate Investment Valuations

Responding to feedback and rapidly changing market dynamics, the RICS Standards and Regulation Board (SRB) commissioned a Review of Real Estate Investment Valuation. The Valuation Review’s aim is to future-proof confidence in this important area of valuation upon which economies and the public rely most heavily. The Review’s focus is on valuations relied upon directly by third parties, predominately for financial reporting purposes.

The Valuation Review was led by Peter Pereira Gray, supported by an expert advisory group, and gathered insights through a public call for evidence and engagement with a broad range of stakeholders. The Valuation Review recommendations are published in the report below.

The RICS Standards and Regulation Board has accepted all of the recommendations from the Valuation Review and will now initiate programmes of work, with input from the profession and its stakeholders, to consider how they should be implemented to achieve the best possible outcomes in the public interest.

RICS Standards and Regulation Board Chair, Dame Janet Paraskeva

I commend the RICS Standards and Regulation Board for commissioning this objective and transparent review and for accepting all of the recommendations. It is my belief that implementing these recommendations as a package will lead to a greater and more enduring trust in the work of RICS Registered Valuers

Peter Pereira Gray, BSc (Hons) DipPropInvest FRICS, FRSA
Chair of the Review

  • About the Chair of the Review
  • Expert Advisory Group
  • Frequently Asked Questions

About the Chair of the Review

Peter Pereira Gray, BSc (Hons) DipPropInvest FRICS, FRSA

Peter has developed an extensive understanding of valuation practice after being involved in commissioning and receiving such services over the last thirty-five years in his role in the property investment sector.

Currently acting as the Managing Partner and Chief Executive Officer of the Investment Division of the Wellcome Trust, Peter also sits on Wellcome’s Valuation Committee. Alongside this he is the co-chair of the Institutional Investors Roundtable, a body representing approximately $14 trillion in assets across the globe.

Prior to joining the Wellcome Trust, Peter was Deputy Life Fund Manager and a Director in the property fund management division of Prupim, at the time one of the UK’s largest institutional property owners (1988 to 2001).

Expert Advisory Group

The Review was supported by a panel reflecting a range of expertise from different sectors, selected by the Reviewer.

Expert advisory group members

  • Michael is the Chairman of the UK Advisory business of CBRE and joined CBRE’s investment team in 1981, running the Valuation department between 1999 and 2018.

    He has had a wide range of Non-Executive roles including the Policy Committee of the British Property Federation and the Bank of England’s Commercial Property Forum, IPD (now part of MSCI).

  • David is a Chartered Accountant with over 17 years’ experience working in commercial, operational, audit and advisory functions in the corporate and not-for-profit sectors. He is currently a Director at the Institute of Chartered Accountants in England and Wales. Prior to this role, David was a valuations specialist at a Big 4 firm.

  • Sarah has over 35 years’ experience in the City and in the investment management industry, including roles as Chief Investment Risk Officer at RBS Asset Management (and formerly at Coutts) and, most recently, Head of Risk at The Wellcome Trust, where her role spanned investment and operational risks.

  • Paul is the Head of Strategy and a Portfolio Manager for European Real Estate at JP Morgan Asset Management. He serves as a voting member of the European Investment Committee and a member of the group’s senior leadership team.

    Paul has served as Head of Private Markets Strategy for the Abu Dhabi Investment Authority (ADIA) and worked for Invesco Real Estate as a Senior Director and Co-Head of Global Research.

  • Currently the Executive Chairman and CIO of PineBridge Benson Elliot, Marc Mogull is also a Senior Fellow in Land Economy at the University of Cambridge and the Chair of the Bank of England Commercial Property Forum. Previously he has held executive/investment roles with Doughty Hanson Real Estate, Goldman Sachs, the EBRD and JMB Realty. He is also a member of the MHCLG/BPF and RICS Commercial Property Forums, and is the co-creator of the Honor Chapman Memorial Lecture Series.

  • Timothy is a planning, environmental and public law specialist. He has over 30 years’ experience of practice in the field of compulsory purchase, land compensation and rating. Prior to taking silk in 2006, he was standing junior counsel to the Inland Revenue on rating and valuation.

  • Isobel O’Regan FRICS FSCSI has been in practise for 35 years and is currently with Savills based in Ireland.  The majority of Isobel’s professional career has been in the area of professional services. Isobel is also currently a member of RICS Governing Council and holds the strategy seat for Valuations and Capital Markets.

  • Michael Prew is as senior Equity Research Analyst at Jefferies LLC based in London heading the Pan-European Real Estate and covering 30 UK REITs with 30 years' sell-side experience. He holds an honors degree from Imperial College in Mechanical Engineering and a master’s degree from its Business School.

  • Sandra is Chief Investment Officer, Chief Executive Officer, and sits on the Board of Oxford University Endowment Management Ltd (OUem). As Chief Investment Officer, Sandra has discretion for all investment decisions and as Chief Executive Officer, she is responsible for overall strategy of the business and ensuring the success of the company.

  • Becky is Chief Financial Officer at Canary Wharf Group. Becky qualified as a chartered accountant with PriceWaterhouseCoopers and has over 20 years of experience in finance with extensive knowledge of the real estate market.

Frequently Asked Questions

Frequently Asked Questions

  • The Valuation Review was commissioned to future-proof practices in the valuation of real estate assets for investment purposes, as a result of feedback and rapidly changing market dynamics. There are structural shifts in investor and occupier demand for real estate – many accelerated by the impact of the pandemic. The RICS Standards and Regulation Board asked the Review Chair to examine the way valuation of real estate assets for investment purposes are conducted and make recommendations to ensure valuations remain relevant and trusted.

  • Peter Pereira Gray was appointed by the RICS Standards and Regulation Board to lead the Valuation Review. The Review was supported by an Expert Advisory Group (EAG), which reflected a diverse range of expertise from different sectors, chosen by Peter Pereira Gray. The skills of those on the on the EAG included valuation, real estate, regulation, financial services, investment analysis and academia.

  • The Valuation Review has been largely UK-focused, where RICS is the principal professional body and regulator of property valuation. However, it has also addressed global standards and assurance issues where appropriate, reflecting RICS’ role in upholding compliance with its standards by members around the world.

  • The independently-led RICS Standards and Regulation Board (SRB) provides oversight of RICS’ core public interest functions such as standard setting, entry to the profession and regulatory processes. The SRB commissioned the Valuation Review and asked the Chair of the Review to deliver recommendations to ensure valuation of real estate assets for investment purposes remain relevant and trusted. The SRB has received the final report and accepted all the recommendations for the Valuation Review and will now implement necessary programmes of work, with input from the profession and its stakeholders, to plan the implementation of the Review’s recommendations.

  • A dedicated RICS staff team provided project coordination and secretarial support to the Valuation Review. The recommendations and the report resulting from the Valuation Review are solely the opinions of the Chair, supported by advice from his Expert Advisory Group and the evidence gathered.

  • The initial evidence gathering for the Valuation Review looked at all aspects of valuations of property assets for investment purposes, but the Valuation Review has primarily focused on valuations of real estate assets for performance measurement and decision-making purposes, upon which third parties place reliance. These are principally valuations for:

    • financial reporting
    • inclusion in prospectuses and circulars, and takeovers and mergers
    • collective investment schemes
    • unregulated property unit trusts
    • commercial investment property financing.

    You are advised to read the full Review report findings to provide a clear understanding of the recommendations. The Executive Summary provides an overview.

    The SRB hope that members, regulated firms and stakeholders alike, will welcome the findings in the Valuation Review.

  • The Valuation Review report recognises and endorses the role of RICS and its Standards and Regulation Board in regulating valuation with independent oversight. It acknowledges the progress that the profession has made by introducing Valuer Registration and embedding it over the past ten years. To drive the highest possible quality of professional practice, the Valuation Review report suggests that, for the highest public interest valuation purposes, assurance should be further enhanced and strengthened. This points to changes, not just in the standards but also in the approach RICS takes to monitoring and assurance delivered through the Valuer Registration scheme and through our firm based regulatory assurance.

    The Standards and Regulation Board has indicated in their response that resultant changes to the RICS standards and regulation framework will be implemented over an appropriate timeframe with regular engagement with stakeholders on progress.

  • Should you have any questions related to the review that are not answered on this page you can email:

  • The Review does not call for absolute prescription of a particular valuation model. It does, however, recommend that the valuation profession should incorporate the use of discounted cash flow as the principal model applied in preparing property investment valuations. It also suggests that further guidance and support for the use of DCF should be created as a way of addressing market needs. The Chair accepts that different methods and models may be used and supports the use of cross checking with different models. It is highlighted in the Review that clients are becoming less accepting of ‘implicit’ valuation inputs, assumptions, and outcomes within the method and models used; instead, the models should be ‘explicit’ to achieve the required levels of transparency, understanding, and education. The Review also notes that DCF has the potential to better consider operational factors and the impact of time. There was substantial support for the widened use of DCF from the Review call for evidence.

  • The Standards and Regulation Board will take a proportionate approach to ensure that SMEs undertaking valuation work are not subject to inappropriate regulatory burden, adopting a right-touch approach commensurate with risk.