Real Estate Appraisal Terminology
Essential terms for understanding RICS, IVS, IFRS 13 and Moroccan real estate law — 50 definitions with the Moroccan context in mind.
Market Value (MV)
The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing (RICS VPS 4 / IVS 104).
Fair Value (IFRS 13)
The price that would be received to sell an asset in an orderly transaction between market participants at the measurement date.
Market Rent (MR)
The estimated amount for which an interest in real property should be leased on the valuation date (RICS VPS 4).
Highest and Best Use (HBU)
The reasonably probable, legally permissible, physically possible and financially feasible use of a property that results in the highest value (IVS Framework).
Capitalisation Rate (Cap Rate)
Ratio of Net Operating Income (NOI) to property value; used in the income approach.
Discounted Cash Flow (DCF)
Valuation method projecting future cash flows over a holding period, discounted at an appropriate rate to reach present value.
Depreciated Replacement Cost (DRC)
Cost to replace the existing asset with a modern equivalent, less physical, functional and economic depreciation (VPGA 5).
Residual Method
Land/development value = Gross Development Value − (construction costs + soft costs + developer profit) (VPGA 10).
Comparable Method
Deriving value from transactions of similar properties, adjusted for differences (VPS 5).
Income Approach
Converting expected income streams into a present value using capitalisation or DCF.
NOI (Net Operating Income)
Gross rental income − vacancy & bad debt − operating expenses (before debt service, tax, and depreciation).
ERV (Estimated Rental Value)
The market rent at which a property could be let at the valuation date.
Red Book
RICS Valuation — Global Standards: the mandatory professional framework for chartered valuers.
IVS (International Valuation Standards)
Global standards issued by the IVSC; applied worldwide for consistent valuation practice.
VPS / VPGA
Valuation Practice Statements / Valuation Practice Guidance — Applications within the RICS Red Book.
OPCI
Moroccan real estate investment fund regulated by AMMC; requires IFRS 13 fair value measurement.
AMMC
Autorité Marocaine du Marché des Capitaux — Moroccan financial markets authority.
ANCFCC
Agence Nationale de la Conservation Foncière — Moroccan land registry.
Titre Foncier (TF)
Moroccan land title under Dahir 1913 / Law 14-07; confers indefeasible ownership.
TPI
Taxe sur les Profits Immobiliers — Moroccan capital gains tax on property.
IPAI
Indice des Prix des Actifs Immobiliers — Moroccan property price index published by BAM.
BAM
Bank Al-Maghrib — Morocco's central bank.
VEFA
Vente en l'État Futur d'Achèvement — off-plan sale contract (Moroccan law).
Zina / Houa
Construction right above existing property under Moroccan Code of Real Rights (Law 39-08).
Copropriété (Law 18-00)
Moroccan condominium/shared ownership regime.
Loi 49-16
Moroccan commercial lease law (2016).
Expropriation utilité publique
Compulsory purchase for public purpose under Moroccan law.
Servitude
Easement — legal right over another's property.
Usufruct
Right to use and enjoy a property owned by another.
Emphyteutic lease
Long-term lease (18–99 years) granting quasi-ownership rights.
Melk
Private freehold ownership under Moroccan law.
Habous
Islamic endowment property — restrictions on alienation.
Guich / Collective land
Tribal or collective land in Morocco, typically non-registered.
Avis de Valeur
Value opinion — simplified valuation, not a full RICS report.
Mortgage valuation
Valuation commissioned for bank lending purposes.
Prudent Value / Mortgage Lending Value (MLV)
Long-term sustainable value for lending — German-rooted concept adopted in EU.
Investment Value
Value to a specific investor given their criteria (as opposed to Market Value to the market at large).
Yield (all risks yield, ARY)
Total return expressed as percentage of capital value.
Gross / Net yield
Gross = annual rent / price; Net = (rent − expenses) / price.
VPGA 4 — Trade-related valuation
RICS guidance for hotels, pubs, leisure — valuation based on fair maintainable operating profit.
VPGA 5 — Plant & machinery / specialised property
Applies DRC method when market evidence is absent.
VPGA 10 — Development property
Residual method for land/development valuation.
Terrain à bâtir
Building land — land legally and physically suitable for development.
Coefficient d'occupation du sol (COS)
Floor Area Ratio — urban planning parameter.
Coefficient d'emprise au sol (CES)
Ground coverage ratio.
Permis de construire
Building permit.
Autorisation de morcellement
Subdivision permit.
CFC (Casablanca Finance City)
Casablanca's financial free zone; offers tax incentives.
MRE (Marocains Résidant à l'Étranger)
Moroccan nationals residing abroad — a major investor segment in domestic real estate.
Certificat de propriété
Ownership certificate issued by ANCFCC.
Attestation de non-opposition
Official statement that no legal objection exists on a property transaction.