Mainstreaming Information Communication Technology (ICT) in Real Estate Practice in Nigeria: Ms Excel for Valuation and Investment Advice

Abstract

Recent study revealed that firms in Minna are not inclined to using MS Excel for valuation and investment advice. A purposive case study of recent lease of Obasanjo Shopping Mall by Niger State Development Company (NSDC) was undertaken to demonstrate and illustrate the use of MS Excel for the valuation of freehold and leasehold interests. Marshall’s equated yield/ DCF hybrid valuation model was adopted on MS Excel worksheet platform to carry out the valuation using data obtained from the NSDC and prospective leaseholders as well as property market. Two growth factor charts were constructed for varied and regular review patterns in MS Excel Spreadsheet based on equated yield 13%, with 2% mark-up on gilts, all risks yield 6.5% and other pertinent valuation data. Intelligent variations and reviews of rents, made possible in MS Excel, coupled with other valuation parameters were applied to arrive at higher capital values of N 148.20 million and N 87.1 million respectively for the NSDC and prospective leaseholder as against N 102 million and N 66.40 million from regular review pattern. The result formed the basis of an agreement under which the 30 -year lease of the commercial property was secured. The conclusion is that MS Excel is a versatile tool for accurate valuation and investment advice and it is recommended that valuers should seek to be trained and retrained to use various versions available.