Andrei Botis, NAI: Valuation is about trust, clarity, and making decisions with confidence

Appraisal & Valuation (ticker symbol APP) is a company that provides valuation, consultancy and property development services. The company is listed on the Bucharest Stock Exchange and is 67.9% owned by Ioan Andrei Botiș. Appraisal & Valuation is the sole representative in Romania and the Republic of Moldova of NAI Global, the largest global real estate services company. Business Review talked to Botis to find out more about real estate evaluation activity.

How did the idea for Appraisal & Valuation come about, and why did you choose entrepreneurship in this field?

When I launched Appraisal & Valuation back in 2010, I was driven by a clear idea: valuation services could be faster, more accurate, and better aligned with the pace of a growing economy. We noticed a gap between what the market needed and what was being delivered — particularly in terms of timing and reliability — and set out to fill it.

My belief was that Romania, following its EU accession, would go through a phase of steady development. Naturally, this would bring an increased demand for asset valuation — whether for real estate, business transactions, or investment decisions. That assumption proved valid, and even though the years following 2020 brought volatility and uncertainty, I continue to believe that valuation will remain a key support function across economic cycles.

To understand just how integrated valuation is in today’s financial ecosystem, consider this: in the first nine months of 2024, real estate loans granted in Romania totaled RON 114.5 billion (approx. EUR 23 billion), according to the National Bank of Romania. Standard mortgage lending alone increased by 11%, while state-guaranteed programs like Prima Casă declined by 15%. Every single one of these loans required a professional valuation.

And that’s just one sector. In reality, valuations support much more — from court cases and restructuring projects to IPOs, M&A activity, and strategic planning. Behind every major financial decision, there’s almost always a valuation report helping guide the way.

For me and for our team, it’s not just about numbers on a page — it’s about trust, clarity, and making decisions with confidence.

Can you explain the process of valuing real estate or other assets?

In my experience, the most important first step in any valuation process is clarity — knowing exactly why you need a valuation. Whether it’s for financing, legal proceedings, or investment decisions, defining the purpose from the start sets the tone for everything that follows.

Once the goal is clear, the next essential step is choosing a certified valuation expert — ideally someone accredited by a recognized professional body such as ANEVAR (The National Association of Authorized Valuers in Romania) or RICS (The Royal Institution of Chartered Surveyors).

From there, the process becomes more technical: gathering data, inspecting the property or asset, analyzing the market, and interpreting the findings. The outcome is a structured, well-documented report that applies the appropriate valuation methods and offers well-reasoned, defensible conclusions.

Behind the formal structure, however, there’s always a layer of professional judgment. That’s where experience, standards, and integrity make the difference.

How is the value of a real estate property estimated? What are the costs involved?

Property valuation relies on well-established methods, applied according to the type and purpose of the asset being valued:

Market Approach: This method involves comparing the property with similar assets recently sold or leased in the same area. Factors such as size, location, features, and overall condition are taken into account. For this reason, valuation professionals must stay closely attuned to real estate market trends.
Cost Approach: This method estimates value based on the cost of reconstructing the property, including land, construction materials, labor, and other related expenses.
Income Approach: Primarily used for income-generating properties, this method calculates value based on projected cash flows and market-expected rates of return.

Valuation costs can vary significantly depending on several factors, including property type, size, complexity, location, and specific project requirements. For example, in 2005, a standard apartment valuation typically cost around €90–100. However, due to inflation and changing market conditions, the fee for a similar service in 2025 is approximately 125 Eur.

In residential valuation, direct costs — such as travel, documentation, and property inspection — can consume up to 90% of the fee. In cases where long-distance travel is required, valuers may even perform the assignment at a loss.

What types of valuation services are most in demand in Romania?

Business Valuation

As the Romanian economy matures and entrepreneurship grows, business valuations are becoming increasingly essential. These services support:

Mergers and acquisitions (M&A): Accurate valuations are key to negotiating deals and securing investor confidence.
Shareholder transactions: Transfers of ownership or buyouts require a fair market valuation.
Start-up investments: Venture capital firms often request valuations before funding rounds.
Litigation and dispute resolution: Courts rely on independent valuations in commercial disputes.

Valuation for Financial Reporting (IFRS Compliance)

With Romania adopting the IFRS (International Financial Reporting Standards) for listed companies and large entities, there is a growing need for specialized valuation services, including:

Asset impairment testing: Regular assessments ensure assets are not overstated on financial statements.
Fair value measurement: Companies must evaluate intangible assets, investment properties, and financial instruments.
Purchase price allocation (PPA): Valuation experts help allocate the purchase price of acquired businesses to their underlying assets and liabilities.

Machinery and Equipment Valuation

These valuations are crucial for companies with significant tangible fixed assets. Common purposes include:

Collateral for financing: Banks require accurate values for movable assets.
Insurance coverage: Proper valuation ensures correct policy limits and claims.
Asset transfers or liquidation: In insolvency or asset sales, valuations guide fair pricing.

Valuation for Legal and Fiscal Purposes

Romanian courts and tax authorities frequently request independent valuations in cases involving:

Divorce settlements and inheritance: Property and business interests must be divided fairly.
Litigation support: Expert valuations are used as court evidence.
Transfer pricing compliance: Multinational companies need valuations to justify intra-group transactions to tax authorities.

What are your company’s future plans?

As the title of a well-known business book by Mike Michalowicz suggests, “Profit First”, our immediate priority — especially in today’s economic climate, marked by inflation and financial pressure — is to boost profitability. Every company needs a stable profit not only to compensate shareholders for their risk and to reward the team’s efforts, but also to ensure resilience during challenging times such as economic downturns, political instability, increasing tax burdens, or other unforeseen disruptions.

Looking ahead, our medium- and long-term objective is to continue growing Appraisal & Valuation, the exclusive representative of the global NAI network in Romania and the Republic of Moldova. We plan to achieve this by capitalizing on our team’s expertise and further strengthening our presence on the AeRO market of the Bucharest Stock Exchange. Additionally, we aim to expand into complementary sectors such as property management, project management, real estate development, and hospitality. In time, we also envision expanding our footprint internationally.

What are the biggest challenges of being an entrepreneur in this field?

Operating in the valuation industry comes with a number of challenges, the most significant being constant pressure on costs. While salaries in Romania have doubled over the past decade, fees for valuation services have actually declined, falling behind inflation over the last 15 years. As a result, pricing pressure remains high, driven by strong competition and client expectations for low-cost reports. Another key challenge is market volatility. The valuation sector is closely tied to fluctuations in the economy, particularly within the real estate and financial markets, making it sensitive to broader trends and cycles.

Like many other industries, we are also affected by demographic shifts. There is a noticeable shortage of skilled professionals in the field, with demand for accredited valuers consistently exceeding supply — posing a significant constraint on growth and service capacity.

In addition, our profession carries a high level of responsibility and inherent risk. A flawed valuation can lead to serious financial and legal consequences for clients and third parties. This means valuers must exercise great diligence, maintain professional liability insurance, and adhere to the highest standards of accuracy, integrity, and reliability. Despite these challenges, the valuation industry remains a vital component of financial stability and informed economic decision-making.

How about the growth opportunities for the valuation market?

Over the past twenty years, Romania has seen a consistent rise in demand for valuation services, driven by growing real estate investments, enhanced financial reporting requirements, and tightening banking regulations. All signs point to this upward trajectory continuing well into the future.

The residential and commercial real estate sectors are expected to remain the most dynamic areas for valuation, propelled by urban expansion, large-scale infrastructure developments, and increased foreign investment.

Furthermore, ESG (Environmental, Social, and Governance) factors are set to have a growing influence on valuation practices, as sustainability considerations become an essential part of how assets are assessed and valued.