INCANS Risk INSIGHT
INCANS Risk Insight Publication: Capital Values Exit the Building, Analysis of Income Enters
For decades there have been calls for a re-think on CRE valuations. Now with the perfect storm of a data revolution, shorter leases, more operating expenses, ESG and Covid, this is the time the property valuation community could finally accept that analysis of the income is more important than capital values.
After 30 years, several books, many papers, and hundreds of presentations, Oxford professor and real estate expert Andrew Baum’s penny has finally started to drop for valuers: analysis of income is more important than capital values. The perfect storm of technological advancements leading a global data revolution, increasingly shorter leases, increased operating leverage, ESG, and Covid have accelerated the need to understand the risks associated with a commercial real estate portfolio, which has now become paramount. “The current situation is more likely to bring significant change than any situation I’ve seen in the last three decades,” says Baum.
Read the full insight here: Capital Values Exit the Building, Analysis of Income Enters
INCANS Risk Insight Publication: Unlocking Real Estate’s Data Potential
In this quarter’s INCANS Risk Insight, the overall theme is how data will be crucial for allowing us in real estate to make better informed decisions.
INCANS Risk Insight Publication: How Well Do You Know Your Tenant’s Income Risk?
2021 will see commercial real estate tenants will pay rent of more than US$1,400bn. In a low capital growth market commercial real estate becomes a fixed income style investment with a floating capital opportunity attached. But, in the current pandemic, it’s important to understand the occupier, their business environment, along with specific requirements.
INCANS Risk Insight Publication: Quantifying the Risk of Tenant Failure
The growing popularity of commercial real estate as an investment is hardly surprising given the prevailing central bank policy of a zero-interest rate environment. Under such conditions government and corporate bond yields no longer deliver the required returns so investors have been forced to look elsewhere for a stable and recurring revenue stream.