Price and current lease A property is bought for £10 million and the buyer incurred additional costs of 6.8% for land taxes, broker and lawyer. The rent is based on a full repair and insurance (FRI) contract of £800k per year, paid quarterly in advance. The Estimated Rental Value (ERV) is £900k. Rental growth – … Continue reading DCF Test
Q&A with Professor Neil Crosby, Henley Business School and Maria Wiedner, CEO Cambridge Finance. I am part of the valuation review committee and I think one of the basic terminologies are centred around the method and model. Also traditional instead of implicit. How would you think the review should address this? Neil: The definitions of … Continue reading Implications of the New DCF Method
Looking back It has been quite the year! The highs of normality after covid and the lows of high inflation, rising interest rates and the energy crisis. We had to muscle our way through this uncertainty including many train strikes that impacted our in-person training! It is against this backdrop we are proud to share … Continue reading Rounding up 2022!
Definition A debt covenant is an agreement or a ‘promise’ set by the lender to ensure that companies or borrowers operate within certain restrictive parameters. They are also known as financial or banking covenants. The purpose of debt covenants is not to burden the borrower but rather to: Protect lenders against default eventsLimit downside by … Continue reading What are debt covenants? How to measure them?
A Financial Model is a structured and dynamic tool which links inputs/assumptions with periodic cash flow to produce results used for investment decisions or recommendations. They are mathematical models designed to represent a simplified version of a financial asset’s performance. Financial models ‘model’ or replicate real life financial issues based on assumptions so outputs are … Continue reading How to build a real estate financial model from scratch
Just like getting a mortgage from the bank to finance your residential property, Commercial Real Estate Debt can also help developers and investors with their business goals. The main purpose of this loan from borrowers is to increase the capital available for investment and to help them diversify their investments. Without a fully functioning debt … Continue reading What You Need to Know About Commercial Real Estate Debt
The layer (or hardcore) method of valuation is used as an alternative to the more traditional term and reversion approach. The approach has both its advantages and drawbacks which can be seen here. The theory with the layer method of valuation is: It capitalises present rent (hardcore rent) into perpetuity.Then it capitalises the top slice … Continue reading What is the layer method of property valuation?
Making predictions Predicting the property market, when it is at its peak or its lowest is difficult. However, for a property developer, the time is right if they can mitigate risk. In order to make informed and effective decisions, developers need to have a deep understanding of their market. It is the length of the … Continue reading Property Development: is this the right time to invest?
Request a sample test First, we need to understand what a financial modelling is so we can keep this in mind throughout the test and better accept why companies are asking us more and more to go through Excel tests in order to proceed to the next round of interviews. Financial Modelling in real estate … Continue reading How to prepare for a real estate financial modelling test
As Boris Johnson announced his roadmap to ease lockdown restrictions, we look at how Cambridge Finance has navigated the pandemic and how we are converting this experience to bring best in class training for all our delegates. Training before Covid-19 Prior to lockdown, all of Cambridge Finance courses were delivered face to face in central … Continue reading Roadmap out of Lockdown
