African Courses

African Real Estate Finance and Financial Modelling in Excel

Price: US$ 1,000


Duration: 2 days

Location: Lagos, Nigeria

Next course: tbc


Overview:

Construct a robust real estate financial model from scratch and use it to assess the financial risk and return profile of an investment project within the African context.

This course is aimed at investment surveyors, real estate finance analysts and property consultants seeking an international best practice approach to building robust real estate financial models that are suitable to the African commercial lease structure.

Delegates will learn to construct a discounted cash flow model for single-tenant and multi-tenant buildings and perform sensitivity analysis for the investment decision giving due consideration to the African risk and return profile.

Delegates will also learn real estate finance fundamentals which will enhance their property analysis and underwriting processes, especially in the absence of comparable transaction data and high land ownership risks.

Who should attend this course:

The African Real Estate Finance and Financial Modelling in Excel courses are suitable for anyone seeking to develop their modelling skills. From entry-level graduates to experienced professionals and modellers, the fundamentals and techniques taught in our courses will help anyone improve their financial modelling expertise, reduce modelling errors and implement international modelling standards.

Content

Day 1


Best practices in financial models

Simple tips to help you become an efficient financial modeller
How to avoid errors and present your models in a persuasive way

Property yields

How to derive cap rates in absence of comparable data

Build your cash flow from scratch

Inputs: passing rent, market rents, initial and exit yields, market growth, review cycles and most importantly, target returns
Outputs: internal rate of return, net present value and worth
Annual and quarterly discounted cash flows: modelling purchase price, passing rent, rent reviews, exit rent and exit price
Gearing: adding senior debt “bullet” loan

Analyse the results

The maximum bidding price
Data tables & sensitivity analysis
Risk visualisation (charts)

Case study: single-tenant office building in the Ghana

Day 2


Dating the cash flow

The dating problem
Date functions
Intermediate calculations

Rent Forecast

Modelling tenancy schedules: rent reviews, lease expiry and vacancies
Modelling hypothetical second leases: void period, rent free and estimated rental values
Time-varying rental growth

Net Operating Income Forecast

Modelling capital expenditure for refurbishment and operating costs (letting fees, void costs, empty rates)
Logic Functions

Investment decision

Sensitivity tables
Risk versus return analysis

Case study: multi-tenant office building in Nigeria

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