The DCF (Discounted Cashflow) method determines the market value of a property by discounting all net cash flows expected during the holding period, as well as the sale proceeds at the end of the planning horizon (exit value), to the valuation date.
Unlike the standardised income approach under the ImmoWertV, which operates with a simplified, static calculation model, the DCF method explicitly maps the actual payment structure over multiple years — including lease expirations, follow-on letting, incentives and maintenance cycles. It is the internationally common standard under the RICS Red Book and IVS and is typically required by foreign investors, funds and lending institutions.
DCF value — simplified formula:
Market value = Σ Cash flowₓ ÷ (1+r)ᵀ + Exit value ÷ (1+r)ⁿ
r = risk-adjusted discount rate, n = planning horizon (typically 10 years)
For determining market value at a given valuation date under the German standard, what remains authoritative is the market value report.
