RATING OF RETAIL PROPERTIES AS PART OF AN ACTIVE ASSET MANAGEMENT

Stephan Seilheimer and Christian Kolb

ERES from European Real Estate Society (ERES)

Abstract: With more global international investors acting in the European real estate market there is a growing demand for professional and local Asset Management. The Asset Manager supports the investor right from the identification of investment opportunities over the holding period until the clustering of portfolios/properties for disinvestments. As the investment market of the past few years has focused more or less on offices in Germany, foreign investors are now developping new products in form of funds, REITS or investment platforms seeking for specific and focused segments such as retail, residential or logistics. As the fees of the Asset Manager are mostly directly linked to the economic success of each property, it has to be a fundamental interest of the Asset Manager to develop and implement a rating tool to support the entire decision-making process from the purchase of the property until its disposal. The paper describes the requirements, the content, the analysis and the implementation of a rating model for highstreet retail properties. The model uses 15 economic parameters and benchmarks on portfolio level including demography, labour market, economic power and market attractiveness on macro and microlocation. Additionally 10 parameters and benchmarks on property and tenant level help to evaluate rental income, tenantís financial situation, service charges as well as the structure and attractiveness for potential retailers of such highstreet retail properties. The implementation and handling of the model by an Asset Manager are shown for a portfolio with 32 retail properties with an investment volume of 120 Mio. Ä.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2008-01-01
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