Discounted Cash Flow

Methodology

A discounted cash flow (DCF) analysis projects each year of a property’s expected cashflow over a defined hold period (typically 10 years), then discounts those cashflows back to a present value at the investor’s required rate of return. A terminal value, calculated by capitalising the year-after-end NOI at an exit cap rate, is added to the present value of the cashflows.

The Insitive DCF module composes with the tenancy schedule and lease-event modules so you can model rent reviews, options, market reviews, vacancy gaps, incentives and capex events explicitly. Cap rate, discount rate, growth and exit assumptions can be sourced from market evidence or your house view, and the implied going-in and reversionary yields are reported for cross-checking.

When to use it

• Investment-grade office, retail and industrial assets.
• Assets with imminent rent reviews, options or downtime.
• Development assets transitioning to stabilisation.
• Acquisition or disposal advisory work for institutional clients.

Standards & references

• IVS 105 — Valuation Approaches and Methods (Income Approach / DCF), IVS 2025.
• IVS 104 — Bases of Value.
• API Professional Practice 2021 — Australian Property Institute (adopts IVS).
• AASB 13 — Fair Value Measurement (Level 3 inputs and disclosures).

Plugin interface

Every method is a self-contained module that plugs into the Valuation App. It exposes a typed input/output schema so it can be invoked from a report writer, a workflow, or your own backend.