Term and Reversion
Term & Reversion is a variant of an international valuation procedure (so-called "Income Approach") for the valuation of real estate . It is a simplified discounted cash flow process, as only two “time windows” are considered.
The part of the total period of use for which the contractually secured gross income is available is called the “term”. The following time is called "reversion". While the income from “Term” is considered to be low-risk due to the contractual situation, the income from “Reversion” is uncertain. Both parts are discounted to the current point in time with a corresponding interest rate (e.g. property interest rate , all-risks yield ) .
The other variant of this evaluation method is called Core & Top Slice .