Fuel stations as properties and enterprises – Selected valuation problems

Property valuers, first of all, asses the value of the rights to the property. The enterprise, itself, is not that often the subject of their valuation. In case of enterprises carrying out its business activity at the special purpose property, the proper definition of the valuation subject (is it an enterprise or a property?) and the selection of the valuation method constitute a key issue.The valuation of the commercial property generating income in relation with the business activity carried out there, such as for example a fuel station, is done using the profits method basing among others on historical sale and cost data. The profits method requires both the knowledge of the market specificity where a given valuated property operates and of the trade executed by a reasonably efficient operator (REO) there. Obtaining the income from this type of property is conditioned by having current assets (e.g. fuel and nonfuel goods in case of fuel stations), equipment, employees, etc. It results in numerous similarities in the calculation of the net operating income for property valuation to the calculation used to assess the enterprise value with a discount cash flow (DCF) method. However, there are many differences with regards to this calculation which do not let equate the property valuation calculation with the valuation of the enterprise carrying out its activities at the special purpose property such as a fuel station.The presentation focuses on the comparison analysis of the calculation of the special purpose property market value in profits method and the calculation of the fuel station valuation as an enterprise in DCF method. The comparison analysis of fuel station valuation also shows both the similarities and differences between the valuation based on the Polish standards and the RICS (Royal Institution of Chartered Surveyors) standards. The aim of the research is to show the differences between the valuation of the fuel station as a property using a profits method and the valuation of the fuel station as an enterprise using a DCF method. Literature studies and case studies were used in the research. The research was carried out from November 2016 to February 2017.