Development property: valuing what does not yet exist

A development valuation is an exercise in pricing a future. The scheme may not yet have consent; the building does not yet stand; the occupiers have not yet signed; the market into which the completed asset will be delivered does not yet exist. Every figure in the appraisal is an assumption about something that has not happened. That does not make development property unvaluable — it makes it the asset class where the discipline of stating, supporting and stress-testing assumptions matters most visibly.

IVS 410 in the framework

The International Valuation Standards treat development property as its own asset class: IVS 410 Development Property sits among the Asset Standards, alongside IVS 400 Real Property Interests. The General Standards supply the spine of any engagement — a defined scope of work, an explicit basis of value, a justified approach, scrutinised data and inputs, models whose outputs remain the valuer’s responsibility, and reporting that discloses how the conclusion was reached. For development work, where the gap between inputs and conclusion is wide and assumption-laden, that spine is not bureaucracy; it is the audit trail for the valuer’s judgement.

Where the uncertainty comes from

Development appraisals are sensitive to a small number of variables, each uncertain in its own way.

Risk and uncertainty are not the same thing

The IVSC’s Perspectives Paper Managing and Communicating Value Uncertainty (May 2026) offers development valuers a distinction worth internalising. Valuation risk — error in process, data handling or execution — can and should be mitigated through controls. Value uncertainty, by contrast, is inherent: it cannot be eliminated, only managed and disclosed. The paper is direct that uncertainty is not a failure of the valuation, and that even a fully IVS-compliant valuation may support a range of credible outcomes. For an asset class built on assumptions, this reframing is liberating in the right way: the standards do not ask the valuer to pretend the future is known; they ask for the assumptions that drive the conclusion to be visible, along with how the conclusion would move if they proved wrong. As the paper argues, transparency about uncertainty strengthens confidence in valuation rather than weakening it.

Reporting that carries its assumptions

The practical consequence lands in the report. A development valuation that states its consent position, cost basis, programme, completion-market assumptions and finance assumptions — and discloses how sensitive the result is to each — gives its reader something a single unqualified figure never can: the means to understand and interrogate the judgement. The IVSC’s current standard-setting work pushes in this direction, with proposed revisions to IVS 106 calling for explicit disclosure of assumptions and reliance on specialists, as discussed in its article on strengthening quality and transparency. The wider standards are also in motion: the IVS 2028 Exposure Draft was consulted on between 30 January and 30 April 2026, with the next IVS due to be issued in January 2027 and effective from January 2028 — a cycle development valuers will want to follow.