Assessing Subjectivity in the Valuation of Retail Properties in Spain

The extent to which subjective influences impact on assessed valuations is an under‐researched area. Valuation practice within Spain is seemingly less developed than in the UK and other western European countries and explicitly allows for subjective adjustments in deriving the value of a property. This study, using a three stage modelling approach, seeks to quantify the impact of this effect on the valuation of retail property. The analysis uses data from a major valuation company within Spain and examines evidence from five cities. The results show that subjectivity corrects the model by as much as 12%. The study demonstrates that the variables with the greatest impact are age of property and construction quality rather than economic/market factors. This outcome highlights that valuation in Spain is still a more technical rather than a financial discipline.