From March 31, any RICS (Royal Institution of Chartered Surveyors) member undertaking a real estate valuation in the UAE must be enrolled on the Valuer Registration Scheme (VRS). The impact of this change will be to increase confidence and transparency in the quality of services offered to investors and developers to the overall benefit of all market participants.

Following the global financial crisis, various regulatory bodies, governments and central banks undertook reviews of how real estate valuations were conducted and regulated. These reviews have resulted in a variety of mandatory and statutory regulations being enforced across the globe.

One such is the creation of the VRS by RICS, an independent professional body originally established in the UK by Royal Charter in 1868. This initiative, which is mandatory to all RICS members, was launched in the UK in April 2011. This programme has been rolled out steadily across continental Europe since then and became mandatory in the UAE with effect from March 31.

Valuations underpin nearly every financial decision we make, from home mortgages and investments to corporate finance transactions, company accounts and stock market listings. Any person or business organisation that occupies, owns, develops or trades real estate assets in today’s global markets relies upon a valuer’s expertise.

The objective of the VRS is to raise the credibility of valuers and provide clients with absolute confidence that by using a RICS-registered valuer they are using the best-regulated and qualified professionals in the field. The VRS will only apply to RICS members, who must be able to demonstrate a high level of experience in both the market sector (for instance, residential) and geography (e.g., the UAE) where the valuation is being undertaken.

Members will be required to document their relevant technical knowledge/experience, geographical knowledge/experience and record of undertaking such work for an appropriate period when applying. All applications will be reviewed and members achieving ‘registered valuer’ status will then be subject to monitoring and review not only on application but also pro-actively on an ongoing basis.

The VRS initiative should help mitigate the risk of non-regulated and under-qualified valuers practising in the market which at present is a major industry concern. By appointing a VRS registered valuer, clients will have confidence that they are working with regulated and qualified professionals who adhere to International Valuation Standards (IVS) and the RICS Red Book Valuation Standards; are committed to openness and transparency; are experts in their field, capable of delivering credible and high-quality valuation reports that are fully auditable and would stand up to legal review.

VRS forms part of broader moves to improve the regulation and transparency of the UAE real estate market. Another important initiative in this direction is the proposed adoption of International Property Measurement Standards (IPMS) by the Dubai Government. 


Market transparency

This will mean that all transactions can be analysed to a set of globally consistent metric property measurement standards which will then lead to appropriate data being used within VRS compliant reports. One of the most significant concerns for any real estate investor is the transparency of the market and the lack of information on which to base investment decisions.

The adoption of IPMS and IVS underpinned by RICS’ Valuer Registration Scheme will help improve the transparency of the UAE market and thereby attract further investment.

Provided they are actively enforced, improved valuation standards, transparency and confidence in valuers’ reports will benefit the UAE real estate sector. To meet the ambitious expansion and development projects which the UAE has become so known for will require international confidence not only in the sustainability of the market, but also in the valuations provided to support financing and investing in it.

With more clients crossing borders both regionally and internationally it is imperative to have a common valuation qualification that is trusted and recognisable across the world.

The UAE is the first country in the Middle East to introduce VRS. This is yet another clear benefit for a country that always leads from the front and perpetually seeks to improve the quality of advice and standards available in the local real estate market.


— The writer is the head of valuation advisory at JLL Middle East and North Africa.