The Financial Regulatory Authority (FRA) has issued the second edition of the Egyptian Real Estate Valuation Standards, more than 11 years after the first edition, in a new step aimed at improving the efficiency of non-bank financial markets and enhancing the quality and reliability of valuation work related to economic activities at both the local and international levels.
The new standards were issued under FRA Board Decision No. 191 of 2026, in light of the provisions of Law No. 10 of 2009 regulating the supervision of non-bank financial markets and instruments, as well as the laws governing insurance, capital markets, financial leasing, and mortgage finance activities.
The move also seeks to strengthen the FRA’s supervisory and regulatory capabilities by building efficient and transparent markets where valuations are based on clear standards aligned with the latest international standards, while keeping pace with market developments and Egypt’s legislative and economic environment.
The FRA had previously invited market participants to submit proposals in light of changes that had occurred since the first edition of the standards was issued under FRA Board Decision No. 39 of 2015. These consultations ultimately contributed to the development of all components of the second edition of the real estate valuation standards.
Supporting real estate investment and financing
FRA Chairperson Islam Azzam said real estate valuation standards are particularly important in supporting mortgage finance, real estate investment, real estate investment funds, and all activities linked to real estate assets.
This provides strong technical support for these activities’ contribution to the national economy by improving the reliability of valuation work, which in turn enhances their attractiveness to foreign and domestic investors and increases their regional competitiveness, he added.
Azzam said the FRA had ensured that the standards were aligned with the latest International Valuation Standards (IVS), which have been in force since 2025, while also ensuring full compatibility with the legislative and regulatory frameworks governing activities in Egypt.
This would ensure the application of valuation methodologies characterised by transparency, consistency, objectivity, and international comparability, positively supporting related activities in Egypt, he added.
Strengthening professional and ethical standards
The real estate valuation standards require valuers to adhere to ethical principles that prohibit conduct involving dishonesty, fraud, or deception.
Valuers and their supporting teams must possess professional competence, comply fully with the standards, treat all clients fairly and objectively, maintain their independence, and disclose any potential conflicts of interest.
All of this is subject to strict quality control over the valuation process. All data and information related to a valuation must be retained for at least five years from the date the report is prepared, or for two years following the latest legal proceedings relating to the real estate asset being valued.
The standards define the scope and requirements of a valuation, including clear identification of the asset, the accuracy, nature, and sources of information relating to it, the purpose and date of the valuation, and surrounding environmental and social factors.
They also allow the valuer to select the basis most appropriate to the nature of the asset and the purpose of its valuation. The standards identify a number of valuation bases, providing detailed explanations of each basis and all its constituent elements, as well as how to determine the highest and best use of an asset.
Three principal valuation approaches
The standards set out three principal valuation approaches: the market approach, the income approach, and the cost approach. They also specify a range of methods under each approach.
Valuers are required to select one or more of these approaches to value an asset based on the definition of the value being sought and the purpose of the valuation.
Valuers should also consider using multiple approaches and methods to arrive at an indication of value, particularly where factual information is insufficient to reach a reliable conclusion.
The real estate valuation standards also address the data and inputs used in the valuation process to ensure they are utilised as effectively as possible. These must always be based on factual information, such as measurements and published prices.
Valuers should balance such data in terms of accuracy, clarity, completeness, and timing, disclose it transparently in the valuation process, and take into account the impact of environmental, social, and governance factors when calculating an asset’s value. The standards provide examples of these factors to assist valuers.
Enhancing valuation reports and documentation
The standards emphasise that real estate valuation reports and documentation are fundamental pillars of compliance, as they help enhance professional competence, transparency, and comparability, and strengthen confidence in the outcomes of the valuation process in a manner that serves the public interest.
Accordingly, the standards establish minimum requirements for the elements that must be included in a valuation report.
Documentation and reports must be sufficient to explain the valuation approaches and methods used, the inputs and data relied upon by the valuer, and how risks were managed. Results and review procedures must also be documented and retained to ensure their integrity and allow them to be retrieved when required.
Valuation of real estate rights and properties under development
The standards issued by the FRA also cover rights associated with real estate, broadly including ownership, secondary rights such as possession or leasehold rights, and rights of use without exclusive control over the asset.
They define the scope of such rights, the approaches used to value them — market, income, and cost — and methods for determining market rental value.
The standards also establish rules for valuing properties under development, including the construction of new buildings, previously undeveloped land following the installation of infrastructure, the redevelopment of previously developed land, and improvements or modifications to existing structures.
Practical applications to support valuers
In this context, Azzam said the FRA had added a number of important annexes to the standards, comprising a set of practical applications that include all definitions, explanations, and permitted approaches, with the aim of facilitating valuers’ work and helping build their capabilities in this field.
The first application annexed to the standards covers real estate valuation and is supported by illustrations of the valuation process, beginning with selecting the approach, defining the scope of work, and collecting and analysing data.
A second application covers valuation for financial statement preparation purposes, including the relevant steps and references.
A third covers valuation in mortgage finance and financial leasing cases, while a fourth addresses the valuation of projects and properties under construction.
The annexes also include an indicative valuation report template containing all elements that must be taken into consideration.
140-page guide sets out the new standards
The standards are set out in a guide accompanying the decision that runs to more than 140 pages.
It is divided into nine chapters covering the structure of the valuation standards; glossary of terms; valuation framework standard; scope of work standard; bases of value; valuation approaches; data and inputs; valuation models; and, finally, documentation and reporting standards, in addition to the annexes.
