Essential Commercial Valuation QA Checks

A commercial report can be technically well reasoned and still be held up by one figure that has not carried through. A market value of £2,450,000 in the executive summary, for example, may appear as £2,400,000 in the valuation section after a late amendment. These are the essential commercial valuation QA checks that protect the report before it reaches a lender, panel manager or client.

This is not about questioning the valuer's judgement. It is about reviewing a document that may have been revised several times, under time pressure, with data drawn from leases, comparables, schedules and instructions. The most useful review checks the report as one document, not merely as a set of individual pages.

Start with report-wide figure reconciliation

The first check is simple in principle and easy to miss manually: every key figure should reconcile wherever it appears. This includes market value, market rent, passing rent, floor area, net initial yield, equivalent yield, valuation date and any special assumptions.

A report may refer to £185 per sq ft in the comparable analysis, £180 per sq ft in the valuation rationale and £175 per sq ft in a table carried over from an earlier draft. Each figure may be defensible in isolation. Together, they raise an obvious question for a reviewer: which one supports the concluded value?

The same applies to areas. A property described as 2,780 sq m in the valuation calculation but 2,870 sq m in the property description can change the implied rate materially. The audit should identify every occurrence, test whether the differences are intentional and make sure the adopted basis of measurement is stated consistently.

Check calculations, not just displayed totals

Displayed totals can look correct while the calculation beneath them does not. For an investment valuation, review the rent, yield and years' purchase against the stated capital value. Where there are deductions for purchaser's costs, rent-free periods, voids or capital expenditure, those assumptions should be reflected in the arithmetic and explained in the narrative.

A useful check asks whether the implied rate per sq ft, capital value and yield tell the same story. If a report concludes at £3,000,000 on 30,000 sq ft, the implied £100 per sq ft should accord with the commentary and comparable evidence. If it does not, there may be a genuine reason, but it should be clear on the page.

Test the link between comparable evidence and conclusion

Comparable evidence is rarely a perfect match. That is why the report needs to show the valuer's reasoning rather than merely list transactions. The review should test whether each comparable's date, tenure, area, price, rent and analysed rate have been carried accurately into the analysis.

A common pressure point is a comparable which has been analysed at a different area from the subject property, or with an unadjusted price that includes incentives, fit-out or an unusual lease term. A single incorrect analysis can influence the range of evidence and, in turn, the adopted rate.

The key question is not whether every comparable supports the conclusion exactly. It is whether the report explains why the adopted figure sits where it does within the evidence. If the subject is valued at £210 per sq ft when the strongest comparables lie between £175 and £195 per sq ft, the report should identify the differentiating factors. Superior specification, a longer unexpired term, stronger covenant or a particular micro-location may justify it. Silence will not.

Watch for stale dates and mixed bases

Dates deserve their own check. Transaction dates, lease dates, inspection dates and valuation dates can all change during drafting. A comparable agreed after the valuation date may still be relevant context, but it should not be presented as evidence available at that date without suitable qualification.

Similarly, do not allow headline rents, net effective rents and passing rents to be treated as interchangeable. If a comparable rent reflects a rent-free period, the analysis should state whether the figure is headline or net effective. The same discipline applies to NIY, equivalent yield and reversionary yield. They are not substitutes, even if a table makes them look similar.

Read the lease as part of the valuation, not as background

Lease terms often drive the conclusion, yet they can become compressed into a short paragraph that does not match the evidence elsewhere. Review the tenant, passing rent, lease expiry, break dates, review pattern, repairing liability, rent-free periods and incentives against the lease summary and valuation approach.

Take a property with 7.2 years unexpired to lease expiry but a tenant break in 2.2 years. A report describing it simply as having "seven years unexpired" risks overstating income security. That does not determine the value by itself, but it affects the yield adopted and the reader's understanding of risk.

Tenant covenant statements need the same care. If the report refers to a named occupier but the lease is held by a different group entity, confirm the contracting party and any guarantee. A general statement that covenant is "good" is less helpful than a concise, supportable explanation of who is liable for the rent and why that matters to the valuation.

Check the instruction against the finished report

A technically sound valuation can still be returned if it has not answered the instruction. Before issue, compare the draft against the agreed scope, assumptions and any lender or client-specific requirements. This is where omissions tend to arise when the instruction is received separately from the report template.

For secured lending work, that may include the marketing period assumed, the treatment of vacant accommodation, commentary on liquidity, or prescribed disclosures. For a high-rise or mixed-use asset, an EWS1 reference may be required even where the document is unavailable or not applicable. The report should say what has been provided, what has not, and how that position has been reflected in the valuation.

This is an area where judgement matters. A missing item is not always a reason to stop. It may require a caveat, a special assumption or further client instruction. The review's job is to flag the gap so the valuer can decide the right response before the report leaves their desk.

Look for contradictions across the narrative

A lender or review team reads the report as a whole. They will notice if the executive summary describes the property as fully let while the valuation section assumes a six-month void for part of the accommodation. Both statements may have originated from valid drafts at different stages. Left together, they undermine confidence in the report.

Narrative contradictions can be more difficult to find than calculation errors because the relevant statements may sit many pages apart. Useful searches include tenure, vacancy, condition, planning, environmental matters, flood risk, tenant profile and market commentary. If the report says there is no recent evidence in one section but cites a transaction from the previous month in another, the point needs resolving.

This is also where overly broad wording creates avoidable risk. If market commentary states that demand is strong, but the evidence records extended marketing periods and several price reductions, qualify the statement. Markets can be active for the best stock and difficult for secondary assets at the same time. The report should reflect that distinction.

Build a review process that fits the workload

The best review process is proportionate. A straightforward, owner-occupied industrial unit does not need the same depth of lease and income analysis as a multi-let office investment with breaks, incentives and upcoming reversion. But every report benefits from a consistent final pass covering figures, evidence, terms, instructions and contradictions.

For firms handling volume, a second pair of eyes is particularly valuable where the original valuer has been close to the file for several days. Confirmation bias is normal: once a conclusion is settled, the mind tends to read supporting material more readily than conflicting material. An independent review, whether by a colleague or a specialist audit tool, creates useful distance.

WriteUp is designed for that final stage. It reviews draft reports in one to two minutes and flags inconsistencies in figures, areas, rents, yields, lease terms, comparable evidence and report-wide statements. It can also test stated requirements against Red Book standards, lender instructions and client criteria. The valuer remains in control of every finding. Report data is processed privately and encrypted, with no storage or model training.

A careful final review will not remove the need for professional judgement. It gives that judgement a cleaner document to work with. Before issue, ask one practical question: if a lender's reviewer traced the conclusion back through every number, lease term and comparable, would the report lead them there without hesitation?