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New research by Trowers & Hamlins reveals need for “placemaking valuation” in real restate

New research by Trowers & Hamlins reveals need for “placemaking valuation” in real restate

Social, cultural and environmental factors should be measured alongside financial outcomes to determine the success of developments, finds a new report backed by industry and government.

A new property value measurement tool has been proposed by international law firm Trowers & Hamlins. This is the result of collaborative research undertaken with Oxford Brookes University’s School of the Built Environment, including a national market poll of UK residents and a roundtable discussion and questionnaire with industry leaders.

Trowers & Hamlins’ research proposes a wider assessment of value, beyond financial measurement, in order to deliver better – and ultimately more financially successful and sustainable – developments. Their report was launched today at MIPIM, the world’s leading international property conference in Cannes, France, and is supported by central government through UKTI’s Regeneration Investment Organisation, as well as industry stakeholders.

Entitled Highly Valued, Hard to Value: Towards an integrated measurement of real estate development, Towers & Hamlins’ research provides both the public and private sectors with a blueprint to development and redevelopment that is not only financially beneficial, but considers a range of factors including functional, social, cultural and environmental value to increase the positive impact of development on people and places. It demonstrates that investors, developers and local authorities do not need to compromise their bottom line in order to make a better built future.

Key findings from the research include:

  • The public is hungry for better places: A national market poll of 2,000 UK residents revealed that, when looking to own or rent a home, individuals’ priorities beyond pure affordability are an area's reputation, security and good design;
  • The industry desires long-term success: A roundtable debate with leading industry professionals showed support for a metric that would guide them to create developments that are financially and socially prosperous; 
  • A broader definition of value will lead to long-term financial success: Case studies like Argent’s redevelopment of King's Cross and Liverpool One shopping centre demonstrate that long-term vision pays off; and
  • A more integrated measurement of value in real estate will facilitate and support international investment through increased knowledge of what makes developments successful.

Financial viability underpins the real estate sector – but increasingly investors, developers, local authorities and planners must consider a broad range of factors to ensure a successful development balances short-term financial return with long-term financial stability and the need to create successful and sustainable communities.

The research proposes a number of ways forward, including:

  • Improving information for the industry to consider a broader range of value measurements;
  • Enhancing valuation methods to help quantify intangible elements such as 'community participation';
  • Influencing planning policy – not to complicate the planning process further, but to create a transparent framework for ‘best practice’ in real estate development; and
  • Introducing metrics that quantify successful development. Such measurements could sit alongside financial valuation reports, in a similar way to an EPC report.

Sara Bailey, Partner and Head of Residential Real Estate at Trowers & Hamlins, commented:

“Our research shows there is a gap between pure financial valuations and the true value of what a real estate development can deliver, along with a strong correlation between successful developments and those which produce a higher return to investors. Trowers & Hamlins advises across the real estate industry and we see there is a great opportunity for all parties to work together: for developers to demonstrate the value they deliver, for investors to be better informed of the real estate they invest in, and for central and local government to have confidence that their development partners share their vision of creating successful and economically healthy local economies.”

Trowers & Hamlins has launched this research with the support of the UK Government, through the UKTI’s Regeneration Investment Organisation (RIO). Speaking at the launch Sir Michael Bear, Chairman of RIO, praised the research:

“My work as chairman of the Regeneration Investment Organisation brings me into contact with the leading global investors. The Hard to Value report is timely because it echoes what I am hearing from those investors – they are increasingly concerned not only with financial return but with the quality of place being created through their investments and the impact on cities, town and communities.”

David Partridge, Managing Partner for Argent, also voiced his support:

“The industry needs clear, established guidelines on how to measure value in order to help achieve beneficial outcomes for all parties, from financial success to positive impacts on places and people. A metric which might be modelled on something like a BREEAM-style rating for the positive impact of developments on society in the wider sense could greatly help investors, developers and local authorities to make smart decisions for the long-term. Ultimately, we all benefit if we can raise the bar and deliver more.”

The interactive Hard to Value report summary is available to download here or at

For a copy of the full report please click on the link below.

Download as Adobe PDF document