A Greenfields Valuation is a valuation that estimates the cost to replace an asset, assuming there are no existing underground services or adjacent buildings or other similar constraints that will adversely effect the cost of reconstructing or replacing the asset.
Greenfields unit rates are typically lower than brownfields unit rates.
Victoria
In Victoria the DVC have issued specific guidelines that state Greenfields Valuations should be used.
Section 3.3.2. of the Fair Value Asset Valuation Methodologies for Victorian Local Governments Guidance Note states that "the unit rates (labour and materials) and quantities applied to determine the replacement cost of a component must be based on a “greenfield” assumption. The replacement cost, as determined under this assumption, may differ from the actual treatment cost when a component is replaced, for example due to the reuse of in situ materials."
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External Links & References
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- Fair Value Asset Valuation Methodologies for Victorian Local Governments Guidance Note - Department of Sustainability & Environment (December 2005)