This Certificate In Commercial Real Estate Valuation & Climate Risk Course gives delegates a firm understanding of the why, what and how of commercial property valuation. Starting with the foundation of the concept of commercial property valuation. Learn each step from information gathering and due diligence to the creation of a valuation using financial modelling.
We look in-depth at the climate risk impact on long-term value drivers and how to build this into your calculations. Then look more closely at financial models, using real life examples and case studies. Our aim is for delegates not only to be able to produce a valuation for a commercial property but also to fully understand it.
Details
Duration: Virtual Live – 10 sessions
Location: Virtual Live
CPD Hours: 35
Level: General
Course fee:
(Payment plan available)
Next Dates:
Content
Sessions 1 & 2
Preparing to Value
• The concept of valuation
• Valuation steps
• Due diligence
• On site investigations – inspection & measurement
• Market sentiments
• Ascertain value significant lease terms in a tenancy
• Rental analysis
Property Yields
• Input versus output yields: initial, reversionary, exit and equivalent yields
• Calculation of output yields, including the equivalent yield in the Traditional Method and Discounted Cash Flow
• What are yields telling you about the property?
Valuation Methods
• Identifying the appropriate method of valuation and yields
Sessions 3-4
Best practice 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
Implicit investment valuation methods
- Term & Reversion
- Layer / Hardcore
- Property yields
- Defining term and reversionary yields
- Calculating the equivalent yield
Build your cash flow from scratch
- Inputs: passing rent, estimated rental value, 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 / Leverage
- Adding senior debt “bullet” loan
Analyse the results
- IRR, NPV and maximum bidding price
- Data tables & sensitivity analysis
- Risk visualisation (charts)
Case study:
- Single-tenant office building in the UK
Sessions 5-6
Rent Forecast of Multiple Tenant Properties
- Modelling tenancy schedules
- Rent reviews, upward-only, break options, lease expiry
- 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)
Investment decision
Case study: multi-tenant office building in the UK
Sessions 7 -10
Module 1 – Basic concepts property valuation
by Cambridge Finance
- The concept of valuation
- Valuation steps
- Conventional valuation methods
- Market sentiment
Module 2 – How does climate change affect property valuation
by Climate Risk Services
- What is climate change
- Identifying risk channels
- Understand asset-level climate risk
- Understanding market-level climate risk
Module 3 – Discounted Cashflow Method
by Cambridge Finance
- Setting up the cash flow method using Excel functions
- Present Value (PV), Future Value (FV), and Discounted Cash Flows (DCF)
- Calculation of Exit Value
- Capital Value and returns calculations using Excel functions
Module 4 – Integrating Climate Risk into DCF Model
by Climate Risk Services
- Identifying main risk drivers
- Assign probabilities and damage curves
- Develop Monte Carlo and Bayesian probability distributions of financial impact
- Update Risk Management Framework
Taught in conjunction with
