Since KIB’s incorporation in 1973, Real Estate Appraisal Division has been developing until became a key reference for numerous governmental authorities, banking institutions, investment and real estate companies. It is worth noting that the Division was approved by CBK to appraise debts settlement real estates in 1986, and has recently been approved by CBK to undertake real estate appraisal for the companies governed by Financial Stability Law (Law No. 2 of 2009). Moreover, it has been approved as one of the entities authorized to evaluate the projects of Partnership Technical Bureau affiliated to Ministry of Finance, in accordance with Law No. 7 of 2008. READ has also been approved by the Ministry of Trade and Commerce as a certified appraiser. This is attributable to the accumulated experience of the Division’s technical team, as well as the credibility and confidentiality of dealing with customers.
Bases and Principles of Real Estate Appraisal
KIB’s Real Estate Appraisal Division applies both scientific and professional approaches to determine the value after inspecting the property and the surrounding area as well as studying the real estate market to determine the property’s fair market value.
Several approaches are applied to determine the value of the property, starting with the cost approach that depends on estimating the value of the property after deducting the depreciation, and adding the value of the land in light of the market price.
Income approach is another method which is based on the property’s cash flow and deduction of the prevailing percentage of vacancy and periodic expenses, which leads to determining the net income of the property. Moreover, the proper capitalization rate is applied to get the value of the property.
In addition, market comparison approach is used through gathering information on the actual transactions that took place within real estate market for properties similar to the one being appraised, and applying the needed adjusting factors to determine the property’s value.
Accordingly, an appraisal report is issued, including all observations and specification noticed during inspection. The report is approved by the concerned appraisal engineer and the Division Manager. The customer will also be provided with signed pictures of the property.
READ’s roles and responsibilities include studying the projects’ construction costs and their feasibility, following-up implementation of the project’s milestones and reporting the same to the concerned Departments and Divisions in the Bank or to the investors.
Real Estate Appraisal Division team is comprised of engineers and assistant engineers specialized in real estate appraisal field. Furthermore, they have received a high-level training and specialized local and abroad courses to be the best in real estate appraisal field in the State of Kuwait. They also have scientific and market experience acquired throughout the years of their service in the Division.
Services Offered by Real Estate Appraisal Division
- Appraising all types of properties (private houses, apartment and commercial buildings, complexes, hotels, hospitals, schools, factories and etc.) for individuals, companies and institutions.
- Appraising properties inside and outside the State of Kuwait.
- Undertaking economic feasibility studies for projects.
- Specifying the economic rents for units.
- Estimating costs for construction projects
READ’s Periodic Releases
- KIB’s annual real estate report.
- Quarterly report of Kuwait real estate market.
- Semi-annual report on construction cost.
- Construction Material Report.
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