Valuation on completion

A valuation on completion assesses what a property will be worth once works are finished, rather than its current, as-is condition, and is the basis lenders use to size a facility against the finished asset rather than the unrenovated or partially built one in front of them today. It is standard on construction finance, where the security barely resembles the eventual asset at the start of the facility, and is also used on renovation or refurbishment lending where the improved property, not the current one, is what ultimately supports the debt. Because it depends on assumptions — build quality, finishes, timing and market conditions at completion — a valuation on completion is generally more conservative than a simple projection of costs plus expected uplift, and lenders will commission their own rather than rely on a borrower's estimate. Facilities sized against a valuation on completion typically release funds progressively rather than upfront, reducing the lender's exposure to the gap between today's value and the eventual one.

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Construction finance · As-if-complete valuation · GRV