In some countries forests are state or community owned and there is no market for forest land. However, in many countries timberland can be privately owned and thus there exists an active market for it. In Estonia and Sweden private timberland ownership is very high, 54% and 66% of the total timberland area respectively. Since property transactions in general require valuations, the need for timberland valuations is high in these countries. There are several timberland valuation approaches discussed and analysed in timberland valuation literature. Three of the most prominent approaches are the income approach, the sales comparison approach and the cost approach. Although timberland valuation is well-founded in theory, it is often rather different in practice. The timberland valuation methods as well as the underlying assumptions in the methods can vary significantly across countries and regions. The dissimilarities and confusion in timberland valuations are, at least to some extent, related to the circumstance that existing valuation standards comprehend very little guidance regarding timberland appraisal. The thesis in hand is a comparative case study, in which the same interview questions were asked from several timberland appraisers in Estonia and Sweden in order to find out how timberland is appraised in these countries. It was found that the timberland valuation approaches used within a country are rather similar, but differ when comparing Estonia with Sweden. The assumptions used in the valuation approaches vary between countries as well as across companies within a country. In Estonia 3 the appraisers use only the income approach to value a timberland, while in Sweden the appraisers use both the comparable sales approach and the income approach. There are, however, substantial differences in the way the income method is carried out in each country. In Sweden the appraisers use the income approach, to a great extent, in accordance with scientific literature, which cannot be said about the Estonian appraisers. The main differences in the income approach across the countries are the future cash flow treatment, the premerchantable timber value treatment and the length of the time period in the income approach. Along with many other details about timberland valuation practises in Estonia and Sweden, the study also found that none of the appraisers are using the uncertainty intervals in their valuation reports. The consistency and solidarity of Swedish timberland valuation practice results from the existence of the guidelines and recommendations along with the valuation program provided by the National Land Survey of Sweden. Latter is a clear sign of the importance of valuation standards and guidelines.

Valuations play an important role for transactions decisions regarding properties and should indicate the most probably price for the object if sold on the open market. There are different valuation approaches and methods generally summarized as the comparable sales method and the investment method.The object of this thesis is to find out the general practical approach among appraisers when appraising development rights.The methodology used for answering the thesis question is based on a theoretical background of market value definitions, valuation methods, investment theory, and fundamentals of land development, together with an empirical section analyzing valuation reports and interviews held with leading valuation companies in Sweden. Development rights valuations have in this work been characterized by having few comparables. This work has also found that there are many difficulties estimating an appropriate risk regarding how long the development process will take and how the market will look like when property is completed. Due to the lack of available market data, there is also a high uncertainty regarding the variables used as inputs in the valuation. This thesis has found that the preferred approach among appraisers is to use the comparable sales method, trying to find comparable objects that are in the same phase in the development and planning process as the subject property. The residual method, using an investment calculation and then subtract all costs identified as necessary for completing the property, is identified the second best preferred choice. But a conclusion of this thesis is also that many variables assumed are not necessarily derived from the market, but rather from appraisers own experience and general knowledge as well as second hand information given from other actors like property owner expectations, information of municipalities and developer´s own beliefs and perceptions.The risk within the valuations is also concluded to be handled by very diverse approaches by the appraisers and there is a wish to make deeper research about how this could be more ultimately handled by the valuation core in the future.