Managing real estate income risk

Great to see such a big turnout for last week’s webinar “Managing real estate income risk. Have we learnt anything since the financial crisis?”.

Will Robson, Global Head of Real Estate Solutions Research at MSCI and our very own Matt Richardson from Income Analytics were joined by Jan Jescow Stoer from KanAm Grund to discuss the importance of income protection as the financial outlook becomes uncertain and some groups of tenants come under greater financial pressure. The session was chaired by Brenda Maton from IPE.

Will Robson cited recent research from MSCI that showed the income component contributes c70% of long term total returns in UK commercial property markets. Matt Richardson went on to explain that investors and lenders need to adopt a more forensic approach to calculating the probability of loss when entering into letting or investment deals. He proposed that the industry should move away from relying on company credit reports and apply analytics from the fixed income markets that focus far more on forward looking probabilities of default more commonly referred to as “PD” rates.

Jan Jescow Stoer provide an excellent case study on how this new approach had been applied at KanAm Grund in Germany.

You can view the entire webinar HERE.

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