RICS Knowledgebase

Valuation is an evolving profession. In some places, such as the UK, implicit income capitalisation models remain prevalent for the valuation of many property investment assets on a market value basis, however, explicit Discounted Cash Flow (DCF) models are being increasingly considered in appropriate circumstances. It is the valuer's decision, based on their professional judgement, which valuation approach, method and model is used. Use of DCF is not mandatory (see Global Red Book VPS 3). RICS is encouraging valuers to be more explicit and transparent in valuation through appropriate consideration and application of method(s) and model(s).

There is a hub about DCF valuation at https://www.rics.org/profession-standards/rics-standards-and-guidance/sector-standards/valuation-standards/discounted-cash-flow-valuation

This includes a link to the RICS Practice Information on Discounted Cash Flow Valuations published in 2023, some FAQs and links to training on DCF

Isurv (subscription required) https://www.isurv.com/info/1600/discounted_cash_flow_dcf has a section on DCF methodology and uses a series of worked examples to put into practice.