Real Estate Asset Allocation Model

The RES Asset Allocation Model offers an intuitive framework for real estate portfolio construction, complete with tailored risk considerations and supported by quarterly updates and client support. Fully customisable to your organisations’ requirements, the key benefits of the RES approach lie in its systematic evaluation of each driver of return (growth, vacancies, and costs). By stepping through each factor’s impact on portfolio risk and return, with clearly defining assumptions, the whole organisation gains an understanding of the sources of risk and return. With swift installation, your team can promptly integrate and utilise the model.

• Strategic Diversification: Gain a competitive edge by allocating your investments across different real estate sectors.  Our model ensures that your portfolio is well-balanced, reducing vulnerability to market fluctuations and boosting potential risk-adjusted returns.
• House View-Driven Strategy: Effective portfolio construction must incorporate a forward-looking perspective to anticipate and adapt to evolving market trends and current pricing. Incorporate your House View in your portfolio plan to ensure that it is in line with your internal forecasts.
• Tailor to your Investment Objective: Customise your strategy to align with your client investment objectives. Our model is designed to be flexible, allowing you to customise allocations based on your risk tolerance, return objectives, and time horizon.
• Data-Driven, Transparent Insights: Leverage the power of our bottom-up cashflow model to project expected returns and volatility. Our model provides you with actionable insights based on historical trends and future projections.
• Alpha Integration: Incorporate alpha-driven strategies. Enhance portfolio construction by integrating superior stock selection and asset management skills.
• Customisable Market Segments: Fit your market view.  Define and adjust your market segments to align with your investment strategy.
• Risk Management: Differentiate risk elements through a thorough risk management approach. Our model assesses risk factors and enables you to experiment with including and excluding properties within a portfolio.
• Simplified Decision-Making: concise and effective graphic summaries of your findings. Our Excel interface’s user-friendly presentation of complex data is straightforward and succinct.

Real Estate Market Simulation Model

The RES Market Simulation Model is a comprehensive, fully interactive, and transparent model designed to replicate the workings of the property market.  It enables users to create consistent forecast scenarios for leveraged and unleveraged income, capital, and total returns, which are comparable across different countries and sectors.

Key Features:

• Customisable to specific country, city, or sector breakdowns.
• A fully interactive forecasting model that adapts to user inputs.

Inputs: Rental growth, Yield change & Vacancy periods

Outputs: Income return, Total return & Capital growth

How the RES Market Simulation Model Works

The Model projects the performance of portfolios consisting of core, well-let properties, based on user-defined scenarios, including:

• Rental growth and Yields.
• Vacancy periods

Simulated Cash Flows:

The model accurately simulates future cash flows, factoring in:

• Lease expiries and reversionary potential.
• Rent reviews, indexation uplifts, and the letting of vacant units.
• Income deductions for revenue costs and capital deductions for capital costs.
• Letting periods applied at lease expiries.

Future Capital Values:

Future capital values are calculated by capitalising forecasted cash flows with the projected yield, offering a clear projection of capital growth.

Adherence to Global Standards

The RES Market Simulation Model faithfully replicates the Global Information Performance Standards methodology, as used by MSCI, for calculating market performance:

• Projects net income receivable and capital values to build both leveraged and unleveraged return scenarios, based on gearing and interest rate assumptions.
• Offers full descriptive measures, including initial yields, vacancy rates, reversionary potential, and over-renting levels.

If you’re interested in the either or both the models above, and you would like details on the Brochure, Demo & Pricing. Please follow the buttons below.