Valuation – Appraisal
Appraisal designations are growing in importance in Latin America and generally are classified into local designations and international designations. The purpose of appraisal designations in Latin America and Peru is to ensure that the holder of such designation has a certain level of understanding and experience in real estate valuation and consulting in Latin America. This thereby allows for potential clients to quickly qualify and determine the quality of the valuation services they may contract such as appraisals. Often, it is important to have both designations – an international designation and a local one. That would allow for the appraisal to be utilized for local loans and banking regulators, but also be accepted by international investors. Each office of LOGAN, including the Lima – Peru office, provides real estate valuation reports with both international and local appraisal certifications.
International Designations
International designations are often more difficult to obtain than local certifications, as they have longer experience requirements – and more difficult examinations such as the MAI examination. In Peru, there is a moderate level of understanding of the international designations – there are few requirements of such certifications required by real estate funds – or sometimes international banks.
MAI – Appraisal Institute (USA), AI Designations
The MAI has long since been the highest certification for appraisers in the US for the appraisal for commercial property. There are few MAI appraisers in Peru because the country is just starting to grow in terms of institutional real estate and institutional valuation needs. The requirements include experience, ethics, and rigorous educations requirements as well as tests. This process often takes approximately 5+ years to achieve. All tests are in English – which makes it difficult for non-native English speakers. Bryan L. Dragoo (MAI Appraiser Peru, 2013) maintains the designation, and works at LOGAN Peru.
Designated Appraisers Peru: 1
Real Estate Fund Requirement: Low
Bank Requirement: Low
RICS – Registered Valuer (UK)
The Royal Institute of Chartered Surveyors is a globally recognized professional body for highly qualified professionals in real estate, construction, and infrastructure and is recognized in real estate valuation in Latin America and in Peru. This designation is recognized in Europe and globally and is often required by companies that have headquarters in the EU, such as Spanish companies that have operations in Peru. Unlike the Appraisal Institute, RICS publishes a valuation standard, the Red Book, which RICS valuers must conform to. The Red Book is often used as standard for real estate valuation in Latin America that appraisers follow. The certification of RICS registered valuer is held by Bryan L. Dragoo (RICS appraiser Peru).
Designated Appraisers Peru: 1
Real Estate Fund Requirement: Low
Bank Requirement: Low
Regulated by RICS – Valuer (UK)
This designation is for firms which have RICS registered valuers. It allows a firm to be recognized by RICS on a company level. LOGAN Peru is part of LOGAN which is a RICS Regulated firm (valuer) since 2019. LOGAN is the 4th company in Latin America to achieve this designation.
Designated Appraisers: Firm Designation
Real Estate Fund Requirement: Low
Bank Requirement: Low
Local Designations
Local designations are often regulated by a local organization who decides what requirements appraisers must achieve. Local app
REPEV – The Repev designation is issued by the national banking regulator – the Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones (SBS). This certification is for the valuation of real estate which is part of the financial system of Peru – such as within banks, real estate funds etc. This is the principle real estate appraisal certification for commercial real estate appraisers in Peru, the list can be viewed here. The certification is based upon experience and the minimum requirement is 5 years of practice as a real estate appraiser. Carlos Neuhuas Repev is currently registered as a certified appraiser under this designation and is the Managing Director of the Peru office of LOGAN.
Designated Appraisers: 500+
Real Estate Fund Requirement: Yes
Bank Requirement: Yes
Consulting
Real estate consulting in Peru has very few designations that are recognized. The concept of market studies for real estate is a relatively new concept in Peru, and the market is limited but growing, especially since the pandemic and recent political turmoil. Companies and investors are ordering more office market studies and industrial market studies in Peru. Since the country has been in constant growth mode for 10+ years – developers have not needed detailed market studies to determine the feasibility of projects. This is changing, as the economy in 2020 faltered, more companies would now order an office market study in Peru or an industrial market study in Peru, for example, because of the market uncertainty.
MRICS – The Royal Institute of Chartered Surveyors does recognize consultants as specialists and experts in real estate consulting and valuation as MRICS. LOGAN has 3 RICS designation achieved for real estate consulting in Peru and 2 for real estate valuation. LOGAN has deep knowledge and understanding in real estate consulting in Latin America (office market study Peru, industrial market study Peru), and the MRICS designation helps establish standards and legitimacy for such work. The requirements for the MRICS are experience, a RICS – accredited degree, or 5 years of experience and a bachelor’s degree, or ten years of experience operating at a level of seniority, specialization, or in academia.
ATSM – This is not a designation or certification, but a standard that is applied to Property Condition Assessments in Peru. The was created by ATSM, a material and building standards organization in the United States. Peru has been working with ATSM in aligning standards in other industries in Peru. LOGAN offers PCAs or Property Condition Assessments in Peru and has done property condition assessments on some of the largest properties in Peru including hotels, hospitals, offices, industrial buildings such as plants, and shopping centers.