REIT ASIAPAC
S G X S TA N DA R D S I N
THE SPOTLIGHT
In January/February 2020 Singapore
Exchange Regulation (SGX RegCo)
undertook a public consultation on
enhancements to the regulatory regime
for property valuers and auditors. SGX
RegCo is in essence seeking to improve
valuation quality by putting in place
stronger competency requirements, and
by requiring more detailed Valuation
Summary
reports,
with
particular
emphasis on disclosures surrounding
income support which may underpin a
value opinion. This follows high profile
incidences where reports may not have
been sufficiently clear on the valuation
inputs, which can then lead to confusion
and uncertainty amongst shareholders.
Transparency is critical in valuation
reports, especially within Summary
sections where the full picture is not
always easy to convey.
IS STRONGER
R EG U L AT I O N T H E
ANSWER?
“While valuation standards
are a significant benefit,
in isolation, they will
not lead to significant
improvements in valuation
transparency. Standards
should be supported by
active regulation to ensure
compliance and ensure that
a high quality of valuation is
maintained”.
Monitoring could come at the regulator
level through the scrutiny of summary
reports that are submitted for listing
purposes, or via Valuation Professional
Organisations, through active monitoring
of valuers, and not simply reactive
monitoring as the result of a complaint.
C A N VA LUAT I O N
MANAGEMENT
P L AY A PA RT ?
Common in the U.S. and growing in Europe,
Valuation/Appraisal Management is a
service that serves to create an additional
layer of scrutiny between the valuer and
the end-user.
Not only does this help ensure that the
valuations have been carried out to a
reasonable standard, but also ensures
that independence between the parties
is maintained by keeping a distinct
separation between valuer and client.
This assures the shareholders that
threats to the valuer’s independence
and objectivity have not occurred.
Valuation/Appraisal Management also
provides performance analysis of the
assets, allowing ongoing, independent
monitoring of the investment. Ultimately,
Valuation Management provides addition
surety of valuation quality in markets
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with limited regulatory strength, as well
as ensuring that valuation opinions are
reasonable and reliable.
MORE THAN JUST
A NUMBER
End-users need to realise the benefits
that fully utilizing a valuer’s skillset can
bring. A Valuation report, particularly
when produced in full compliance with
International Valuation Standards offers
more than just a number to include in a set
of accounts. Valuers should be viewed as a
trusted advisor, able to provide significant
insights into the assets.
About the author: Stephen Williams is a
Chartered Surveyor with over 20 years of
real estate experience, having worked in the
UK and across the Asia Pacific, with a focus
on valuation.
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