Managing property valuation risks: market volatility, floods and fire

AUSTRALIA, 31 May 2022 – JLL’s proptech has moved to the next step for managing valuations of property assets, using software technology that provides instant valuation assessments and management assessments, including identification of environmental risks such as flood and fire.

JLL’s Valuation Advisory group has combined the property valuations expertise of its teams with technology such as AI and machine learning to create its latest Property Intelligence® and technology tool, Valorem®, a state-of-the-art tool that delivers valuation data and risk insights.

The tool enables Geographic Information Systems (GIS) to pinpoint location-based risks surrounding assets held in a company portfolio. The risks that are typically analysed in property portfolios include market risk (risk such as market volatility), property risk (environmental risks such as floods, fire, noise pollution) and price risk. 

According to Tyrone Hodge, Chief Product Officer for JLL Valuation Advisory, Australia has been at the forefront of developing Automated Valuation Models (AVM’s) and offering proptech solutions to house valuations data in one simple dashboard.

“The Valorem platform provides a single tool for companies to organise and manage their portfolio, property and valuation data. We really want to make it as easy for people to look at their real estate portfolios like they would their bank accounts.

“The platform rolls up information into a snapshot of property assets, including the current value of the assets and full portfolio value, property specifications and property attributes, capital expenditure, past valuations of the properties, vacancy rates if it is a commercial building and most importantly location-based risks.

“Our AVM automates the risk and valuation process,” Mr Hodge said. “Whether you need to instantly assess portfolio risk or a portfolio solution to monitor values, our products support always-on insights for smarter lending or investment decisions.

“JLL collects millions of data points from hundreds of public and proprietary sources. Technology is enabling us to curate data and our team of data scientists can develop data products that enable instant assessments of many of these risks and present this via our client facing experience, Valorem,” Mr Hodge said.

JLL has already been at the forefront of rolling out digital solutions for valuations in Australia over the past few years. These include ‘Virtual Inspection Valuations’ to provide for contactless property valuations for residential owners, an Automated Valuation Model (AVM) for residential property and JLL Live (delivering an on demand same day valuation product). Now the launch of Valorem® adds to JLL’s suite of proptech products and Property Intelligence®.

JLL has been actively developing these capabilities around the world and is able to combine millions of unique data points collected daily from within the U.S. and globally. 

While JLL’s suite of technology like Valorem and AVM provides an ‘always on’ option for clients to have a real-time understanding of their assets, it “does not negate the need for human intelligence in valuations, as the technology is only one significant part of the larger picture of a property’s value,” noted Tony Lenamon, CEO, JLL Valuation Advisory, Americas. “Additionally, it helps appraisers reach even more accurate results by providing a benchmark.” 

JLL’s 2,000 qualified valuation professionals are connected across more than 50 countries, sharing insights and real-time data to advise on changing market dynamics and trends before they happen. The team brings together unrivalled human intelligence and experience, with continuous, data-driven insights to uncover a panoramic view of value and risk across sectors and geographies.