ABSTRACT
Forecasting is not new to the property scene. A valuation of a building involves an element of forecastng. A valuation based on an all risks yield is making an assumption about future rental growth for the building being valued. If this was not the case a cost of money yield with perhaps a premium to take account of the illiquidity of the investment would be used to value the building. Likewise a property consultant advising on the purchase of a new property and looking for a bargain for his client must be making some assumptions about the future. These assumptions, as in the case of the market when setting capitalisation yields that are less than money rates, may not be explicit-‘gut feeling’ is often referred tobut forecasts they are nevertheless. And there are many other examples of forecasting. This is inevitable where decisions must be taken today that will affect future performance.
