Hotels and Shopping Centres
Some properties are designed for a certain unique purpose. Examples are sports facilities, schools, prisons, chemical plants, marinas, etc.
A general term commonly used for this category of properties is special properties. When land and buildings are no longer used for their original purpose, it is often difficult or impossible to use them for other activities unless they first undergo more or less extensive alterations.
Valuing special properties requires that the valuer becomes thoroughly acquainted with the special conditions associated with them. In addition, an assessment must be made of the property’s most likely future and development. Will the property be utilized for a long time for the purpose for which it was intended, or will this activity be discontinued? Can the existing buildings be used for other activities, and what would it cost to rebuild or demolish? There are many questions to be answered, all of which should be weighed together in arriving at a probable outcome.
Closely related to the group “special properties” are hotels and shopping centres.
A common denominator for these categories in a valuation context is that it is important to analyze the business carried on in the property. In the case of hotel properties, this means considering the present and future financial and competitive situation of the hotel business.
The same assessment is made for shopping centres, and many other important factors must be considered at the same time.