Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming
The possibility of carrying out the cultivation of numerous plant species in vertical farming highlights the need for policy makers to determine the cadastral value of the buildings in which these production activities are carried out. In this regard, estimates of buildings intended to host vertical...
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MDPI AG
2024-12-01
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| Series: | Agriculture |
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| Online Access: | https://www.mdpi.com/2077-0472/14/12/2211 |
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| author | Giuseppe Cucuzza |
| author_facet | Giuseppe Cucuzza |
| author_sort | Giuseppe Cucuzza |
| collection | DOAJ |
| description | The possibility of carrying out the cultivation of numerous plant species in vertical farming highlights the need for policy makers to determine the cadastral value of the buildings in which these production activities are carried out. In this regard, estimates of buildings intended to host vertical farming are illustrated according to the procedure established by Italian cadastral legislation, which establishes that the fiscal value of buildings intended for vertical farming must be estimated through their market value. Appraisals is carried out using the direct capitalization method but follow two different approaches. One approach is based on the expertise of the appraiser, who acts by making assessments through subjective and arbitrary choices. The other approach is based on the use of best practices, as indicated by international evaluation standards that follow appropriate methodologies. Our comparison between the two approaches focuses on determining the capitalization rate, which determines the estimated value. The market value estimated using the procedures recognized by the valuation standards appears to be more valid methodologically and more reliable. This is demonstrated by applying yield capitalization to the same income cash flow in both formulations. Additionally, through the identification of the conversion cash flow, useful details on financial flow can be obtained and used to determine the value. The obtained results may be useful for public operators for the purposes of determining the value of assets for tax purposes. More generally, they are also useful from a methodological and application point of view in real estate valuation and support the development of tools for making efficient investment choices. |
| format | Article |
| id | doaj-art-03b45e68694a49f98c845cceed8add05 |
| institution | DOAJ |
| issn | 2077-0472 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Agriculture |
| spelling | doaj-art-03b45e68694a49f98c845cceed8add052025-08-20T02:55:38ZengMDPI AGAgriculture2077-04722024-12-011412221110.3390/agriculture14122211Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical FarmingGiuseppe Cucuzza0Department of Agriculture, Food and Environment (Di3A), University of Catania (Italy), Via S. Sofia, 100, 95123 Catania, ItalyThe possibility of carrying out the cultivation of numerous plant species in vertical farming highlights the need for policy makers to determine the cadastral value of the buildings in which these production activities are carried out. In this regard, estimates of buildings intended to host vertical farming are illustrated according to the procedure established by Italian cadastral legislation, which establishes that the fiscal value of buildings intended for vertical farming must be estimated through their market value. Appraisals is carried out using the direct capitalization method but follow two different approaches. One approach is based on the expertise of the appraiser, who acts by making assessments through subjective and arbitrary choices. The other approach is based on the use of best practices, as indicated by international evaluation standards that follow appropriate methodologies. Our comparison between the two approaches focuses on determining the capitalization rate, which determines the estimated value. The market value estimated using the procedures recognized by the valuation standards appears to be more valid methodologically and more reliable. This is demonstrated by applying yield capitalization to the same income cash flow in both formulations. Additionally, through the identification of the conversion cash flow, useful details on financial flow can be obtained and used to determine the value. The obtained results may be useful for public operators for the purposes of determining the value of assets for tax purposes. More generally, they are also useful from a methodological and application point of view in real estate valuation and support the development of tools for making efficient investment choices.https://www.mdpi.com/2077-0472/14/12/2211market valuecadastral valueincome approachappraiser’s expertisevaluation standardsvertical farming |
| spellingShingle | Giuseppe Cucuzza Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming Agriculture market value cadastral value income approach appraiser’s expertise valuation standards vertical farming |
| title | Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming |
| title_full | Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming |
| title_fullStr | Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming |
| title_full_unstemmed | Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming |
| title_short | Valuation Standards and Estimation Accuracy in the Appraisal of a Building Housing Vertical Farming |
| title_sort | valuation standards and estimation accuracy in the appraisal of a building housing vertical farming |
| topic | market value cadastral value income approach appraiser’s expertise valuation standards vertical farming |
| url | https://www.mdpi.com/2077-0472/14/12/2211 |
| work_keys_str_mv | AT giuseppecucuzza valuationstandardsandestimationaccuracyintheappraisalofabuildinghousingverticalfarming |