How we can help your agribusiness
Landowners generally have a decent idea of how much their property is worth. Yet a registered valuation is often a requirement you cannot avoid.
Do you go for the lowest price or you try to maximise the value you get out of it?
A robust valuation delivers value that is beyond the dollar difference you pay for it.
No one has ever regretted basing their decisions on good information. Because it is independent, substantiated, and defendable you can confidently use a quality registered valuation to make important decisions around your equity and business strategy.
In the end, a registered valuation is all about sound decision making and maximising equity.
As a starting point, a good valuation will collate all the relevant information around your property in a structured way to evaluate how it is seen by the market at a specific point in time – the property, the market and the current economic and industry context.
As a next step, your valuation will likely include, but is definitely not limited to:
- Physical attributes – locality, contour, climate, water and irrigation, soils, etc.
- Resource consents and environmental compliance commentary and analysis
- Highest and best land use analysis, alternative uses
- Average efficient production
This analysis will be carefully designed to deliver the most accurate and defendable (including in the Court of Law) market value of your property. It is also tailored to meet your specific objectives as stated in the scope of works.
All factors are analysed to consider both the current land use and potential future uses to which the land can be put. An assessment of current performance will be made and benchmarks specific to the subject property will be established to consider how the market would view the property.
A robust well substantiated valuation report will deliver on more levels, than just a number – you pay a bit more, but the report you get is more valuable to you than the cost difference, because it will inform important decisions with long terms consequences to the value of the property (and owners’ equity as a result) around performance, risk management, acquisitions and divestment strategy, future investment and development, succession planning and a range of other issues.
Few examples
An integral part of the value of the valuation process at Colliers are the conversations you will have with your valuer that will provide solid explanation of our findings, the reasoning behind the chosen methodologies (we always use more than one) and all the data to substantiate our final value.
Being well informed about the market and how your property is faring in the specific situation may make or break your sale process. Registered valuers can assist in not only choosing the right price point, but also make a good case for it, adequately plan and resource your marketing campaign. With increased regulation, one of the biggest barriers for potential out of district buyers is their limited knowledge of the area and they are easily discouraged. Providing an independent assessment specific to your particular property can expand your buyer pool.
Equally, when on the other side of the sales process, engaging a valuation team can expand your pool of opportunities and give you the confidence to bid on properties further away and gain an advantage in negotiations.
Large portfolios or high-value blocks of land can be challenging to sell as one property in the current market. How will the total value be impacted by dividing into several independent units? How to market them to maximise the price you achieve? An experienced registered valuer can model various scenarios for you, so you can start the process with eyes wide open about the trade-offs of each strategy.
If your property is an outlier in some way and your own knowledge of its potential is not evident in public records or to conventional wisdom, it will also not be widely understood in the market. In this case, getting it all on record by an independent valuation professional and keeping a regular track record of its value and performance over time, will ensure you will be able to realise its potential when the time comes.
National markets (such as forestry of intensive farming) are another area where independent valuations are particularly important. With distance, details about sales and property attributes tend to fade or get misrepresented, so without detailed research it is risky to extrapolate anecdotal sales. A registered valuation will bring all the evidence to you in a structured and consistent way for your use in decision making and management.
Risk management and environmental compliance are becoming an ever more important aspects of farm operations. What is required to be compliant in the short to medium term? How are all compliance measures required affecting the productivity? What are the sustainable levels of productivity for a particular block of land under specific land use? Our valuations answer these questions for you or any other interested party.
Conversions are another area that always brings to light strong opinions and as a result, a lot of noise in the market. It is often driven by policy or sudden spikes of particular market driver. Yet, conversion decisions require a long-term view with all the factors currently in play unlikely to have the same effect throughout the process. How do you pinpoint the signals among all the noise? An experienced valuer with a long track record of working in the industry can develop feasibility modelling that will help you understand how a range of assumptions could play out, taking into account not only the industry drivers, but also the specifics of your project and your land.
Can you diversify your operations? Is it helping your bottom line to plant trees on unproductive land? Or add an orchard or a vineyard without affecting your main operation? Farmers tend to stick to what they know, but that may mean they are missing out on new opportunities. Talking to a valuer about branching into other industries can be the first step to increasing the value and the marketability of your property.
This analysis also helps assessing the management’s contribution to farm performance. How much the management is worth to the business as they are not part of the property transaction. One branch of a family may have a management roll, while another part may have equity in the family business. Either way, it is important to have a clear understanding of what the business may be worth without them on the helm. How much do they contribute and influence the performance of the property directly?
This leads us to succession planning, which is always an emotionally charged process, with multiple parties involved, all with different contributions and expectations. Having detailed valuations done on a regular basis over time can help keeping all invested parties informed. Valuations can be used as a starting point for these discussions and can raise the right questions that need to be addressed. Good understanding and well-documented history of the assets and how their specific contributions play into the value or its productivity can aid succession planning and ensure that fair and sustainable decisions are being made at all stages of the process.
The list can go on… and if you have a specific request not mentioned above, please do not hesitate to contact us – we love a good challenge and we are known in the market for providing robust, well-reasoned advice, especially in relation to complex issues.
