Cluttons in Oman discuss the importance of Valuation standards to financial and investment organisations, in light of the current Eurozone crisis and its effect of asset valuations.
Cluttons recognise that the financial insecurity created by the global credit crisis mean that there is a fundamental need to reduce the risk associated with property valuations. Speaking to the Muscat Chapter of the Institute of Chartered Accountants of India on the subject of International Valuation Standards, it was felt that the subject was well received by the profession, as The Chartered Accountants were keen to understand the international standards, as a critical requirement to their role of advising their clients.
The purpose of the seminar was to apprise the audience of the need for compliance with International Valuation Standards in order for there to be credible real estate valuations, which under the current economic climate, is paramount within the banking and financial institutions both here in the Gulf and across Europe.
The speakers were introduced by Mr. Ian Gladwin, Cluttons regional CEO, and Mr. Philip Paul, Cluttons Head of Country, Oman. Mr. Jonathan Fothergill FRICS, Cluttons Middle East Director of valuations, gave the keynote speech on International Valuation Standards and Francis Selvaraj gave a market update.
At the core of streamlining the property valuation process is the relevance of International Valuation Standards such as those prescribed in the Royal Institution of Chartered Surveyors (RICS) valuation standards. These uniform standards can serve as a professional benchmark for valuers around the world in enabling them to respond to the demands of international property markets for reliable valuations and to meet the financial requirements of the global business community.
The role of accurate valuations in minimizing risk was discussed, as well as the consequences of ignoring this essential market information. Jonathan referred to the experience of Dubai and pointed out the perils of a supply driven market with finance available on credit ratings rather than market values and the feasibility of individual projects. The impact of the global financial crisis was referred to but it was made clear that a number of projects would never have come to fruition if reliable market valuations were undertaken.
In addition Mr. Francis Selvaraj, Head of Professional Services, Cluttons Oman, spoke about the local Oman market, as well as an overview of the economy. This touched upon the various sectors of the market and the impact of the interplay of supply and demand were examined.
The seminar finished with a question and answer session where the membership probed the intricacies of the standards and valuation methodology. Particular interest was shown in valuing buildings under construction, the division of land and buildings, valuing in a falling market, building life expectancy, the RICS Indian edition standards, inward investment to Oman and differences in valuation opinion.