The estimated market value is the net operating income divided by the capitalization rate. We determine the rate using comparable properties, and we have three of them.
Property A the cap rate is €192 million/€1,600 million = 12.0%.
Property B the cap rate is €550 million/€5,500 million = 10.0%.
Property C the cap rate is €715 million/€6,500 million = 11.0%.
The average cap rate is 12.0% + 10.0% + 11.0% / 3 = 11.0%.
Market value = NOI / capitalization rate = €264 million / 11.0% = €2.40 billion.
