Justin Sullivan (RICS) in Mexico City: The Future of Real Estate Valuation Standards in Mexico and LATAM

The Royal Institution of Chartered Surveyors (RICS), a global organization that sets standards in property, construction, and infrastructure, seeks to strengthen its presence in Latin America and Mexico. During an event held today in Mexico City, RICS President-elect Justin Sullivan and a select group of commercial real estate professionals discussed the challenges and opportunities in the valuation sector, emphasizing that process standardization is essential to drive development in the country.

According to Sullivan, ensuring the seriousness of valuations through quality and trust certifications is crucial to attracting foreign investment. These certifications ensure that valuations are conducted according to the highest international standards and provide market transparency and consistency. This is especially important in markets like Mexico, where trust and accuracy in asset valuations can make a significant difference in attracting capital and fostering sustainable development in the real estate sector.

Valuation, a value calculation that determines the fair price of a property or asset, is a key process for making informed decisions in real estate transactions, financing, and project development. Sullivan highlighted that precise and standardized valuations are vital to mitigating risks and ensuring that investments are profitable and sustainable in the long term. He also noted that implementing standards contributes to the professionalization of the sector and paves the way for significant economic growth in the real estate sector.

Pablo Israel Escalona Almeraya, Appraisals and Works General Director at the National Institute of Administration and Appraisals of National Assets (INDAABIN), a federal government entity in Mexico responsible for managing, regulating, and valuing the nation’s real estate, pointed out that the most complex and delicate valuation cases in the public sector are handled by appraisers certified by RICS or the American Society of Appraisers (ASA). However, he indicated that less than 10% of national appraisers are certified by these essential and recognized institutions.

Both Escalona and Sullivan emphasized the importance of standardizing processes and certifying appraisers to improve the accuracy and reliability of valuations.

Alejandro Delgado, Country Manager for Mexico at SiiLA, agreed and added that in Latin America, it is essential to standardize the information sources that support valuations. He stressed the urgent need to ensure reliable, conflict-free information sources in a context where data like SiiLA’s on cap rates, vacancy rates, and other key indicators are fundamental to evaluating the profitability and feasibility of real estate investments. “The implementation of uniform standards in data sources will improve the precision and consistency of valuations, strengthening investor confidence in the Latin American market,” Delgado stated.

As of this publication, significant efforts are underway to expand the impact of certifications related to the valuation sector in Mexico.

According to Justin Sullivan of RICS, they are working with Latin American universities to standardize regional practices and with global research institutions to learn how to use artificial intelligence to improve valuation processes.

Integrating advanced technology and academic collaboration are essential steps to achieve a more transparent and efficient real estate market. According to several participants in the meeting with Sullivan, the transformation of the real estate market will not come solely from regulation but from the ability to innovate and adapt to new tools that redefine the precision and trust in valuations.

Alejandro Delgado (SiiLA), Alfredo Giorgana (JLL), Giovanni D’Agostino (Newmark), Juan Carlos Ulloa (Cushman & Wakefield), Lorena Mercado Acevo (FECOVAL), and Pablo Israel Escalona Almeraya (INDAABIN), among others, attended the event.

For more information on the most relevant events for Mexico’s commercial real estate market, explore SiiLA REsource or email us at contacto@siila.com.mx.