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A Conceptual Framework for Retail Asset Valuation: Integrating Quantitative Pricing and Multi-Unit Financial Performance Prediction

Albert Tonoyan, Oluwatosin Dada, Steve Senyo Ayivi-Donkor

Abstract

Retail asset valuation occupies an awkward position between corporate finance, accounting measurement, and spatial economics, yet most operative valuation practice still treats a chain of stores as a single homogeneous cash-generating unit, discounting an aggregate stream while ignoring that unit-level performance within the same portfolio frequently varies by a factor of three or more. This paper develops a conceptual framework that reconciles three traditionally separate measurement logics: intrinsic asset valuation grounded in residual income and discounted cash flow, spatial and demand-driven pricing grounded in hedonic theory, and portfolio-level financial performance prediction grounded in accrual and distress modeling. The framework, designated the Quantitative Retail Asset Valuation and Performance Prediction structure, is built from three interacting components: an asset-level intrinsic value layer that embeds a real-option correction for closure and repurposing flexibility, a spatial demand-pricing layer that translates catchment, footfall, and locational attributes into implicit prices, and a portfolio prediction layer that propagates unit-level signals into forward financial performance estimates under cross-sectional dependence. The paper specifies each component analytically, derives the conditions under which aggregate valuation diverges from the sum of correctly valued units, and proposes operational measurement protocols using accounting, transactional, and geospatial data. Theoretical validation demonstrates internal consistency with clean-surplus accounting and no-arbitrage pricing, while empirical validation synthesizes evidence from valuation accuracy studies, hedonic estimation, and machine-learning prediction in finance. Boundary conditions clarify where the framework applies and where single-unit or pure market- comparison approaches remain preferable. The framework offers researchers a tractable bridge across disciplinary silos and offers practitioners a defensible basis for unit-level capital allocation, impairment testing, and acquisition pricing. The central contribution is a measurement architecture in which heterogeneity, rather than aggregation, becomes the organizing principle of retail asset value.

Keywords

retail asset valuationhedonic pricingresidual income valuationmulti-unit performance predictionreal optionsfinancial distress modelingpanel forecasting

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