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Information queried from GPT:

The valuation of care fund properties is usually carried out by an independent expert and is based on several different valuation methods. The most common methods are:

  1. Income Approach (Tuottoarvomenetelmä): The value of the property is calculated based on its net income, using an appropriate capitalization or discount rate. In care properties, lease agreements are usually long-term, so the predictability of future cash flows significantly affects the value.
  2. Market Value Approach (Markkina-arvomenetelmä): The value of the property is determined by comparing it to similar care properties that have recently been sold. This involves using, for example, square meter prices or yield requirements based on market data.
  3. Cost Approach (Kustannusarvomenetelmä): This estimates how much it would cost to rebuild a similar property at present, taking into account wear and tear and depreciation. This method is often used as a supporting method.

1. Principles of Valuation and Ethical Guidelines

  • Transparency and Objectivity: The valuation must be based on independent and impartial analysis.
  • Professional Competence: The valuer must be qualified and adhere to industry best practices.
  • Compliance with Legislation and Regulation: The valuation must take into account local laws and regulations.

2. Valuation Methods

  • Market-based method (comparable sales method)
  • Income approach (discounted cash flow and capitalized income)
  • Cost approach (reconstruction costs and depreciation)

3. Scope and Documentation of Valuation

  • Content of the Valuation Report: The report must include, for example, basic information about the property, valuation methods, assumptions, and market data used.
  • Verification of Assumptions and Input Data: It must be ensured that the data used is up-to-date and reliable.
  • Sources Used and Market Data: It must be documented where the information was obtained and how it affects the valuation.

4. Special Valuation Cases

  • Long-term Lease Agreements: In care properties, the tenant’s solvency and the duration of the agreements significantly affect the value.
  • Liquidity Effects: Since care properties are often specialized properties, their selling time can be longer, which can affect the valuation.

Valuation standards ensure that the valuation of care fund properties is comparable, reliable, and consistent with market practices.

In addition to traditional calculation methods, the valuation of care properties also uses other factors that can significantly affect the property’s value. These include, for example, adaptability, location, demographics, market situation, and financing aspects.

1. Adaptability and Alternative Use

  • Flexibility of Use: If the building can be easily converted into, for example, apartments, office spaces, or other uses, it can increase its value.
  • Technical Adaptability: The modifiability of structures, room arrangements, and building services affects the long-term value of the property.
  • Regulation and Zoning: If zoning allows for alternative use without significant changes, it can improve the property’s value.

2. Location and Regional Demand

  • Population Development and Need for Services: In growth centers, the value of care properties is higher because the population is aging and the need for services is growing.
  • Transport Connections and Accessibility: Good transport links and accessibility to public transport can increase the property’s attractiveness.
  • Competitive Situation: If there are many similar care properties in the area, rent levels and yield requirements may remain lower.

3. Demographics and Market Situation

  • Age Structure and Need for Care Services: The aging population and demand for care places affect long-term value.
  • Regulation and Support Schemes in the Care Sector: Public sector subsidies and changes in legislation can affect the profitability of care properties.
  • Tenant Risk: A stable and long-term tenant (e.g., a municipality or a large care company) reduces risk and increases value.

4. Market and Financing Effects

  • Yield Requirements and Interest Rate Level: A higher interest rate level increases investors’ yield requirements, which can lower property values.
  • Investor Demand: Care properties can be attractive to institutions and funds, which can drive up prices.
  • Liquidity and Selling Times: Care properties can be slower to sell than, for example, residential properties, which can affect valuation.
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