Global real estate investment trusts : people, process and management

Global Real Estate Investment Trusts: People, Process and Management......Page 5
Contents......Page 7
About the Author......Page 13
Foreword......Page 15
Preface......Page 17
Acknowledgments......Page 19
Introduction......Page 21
1 Envisioning......Page 23
1.1.1 People......Page 26
1.1.2 Process......Page 29
1.2 REITs: an introduction......Page 33
1.2.1 Transparency in governance......Page 34
1.3 Preparing Phase......Page 35
1.4 Envisioning Stage......Page 36
1.5 People......Page 38
1.5.1 Governing Entity......Page 39
1.5.2 Chief Executive Officer (CEO)......Page 41
1.5.3 Chief Financial Officer (CFO)......Page 43
1.5.4 Support Teams......Page 44
1.5.5 Fund Management Team......Page 45
1.6 Vision......Page 46
1.7 Style......Page 48
1.7.1 Active vs. passive......Page 49
1.7.3 Value vs. growth......Page 50
1.7.4 Core, value added and opportunistic......Page 51
1.8 Goals......Page 52
1.9.1 Strategic models......Page 54
1.9.2 Strategic planning process......Page 55
1.10 Objectives......Page 57
1.11 Super REIT......Page 58
1.12 Summary......Page 60
1.13 Key points......Page 61
References......Page 63
2 Planning......Page 65
2.1.1 Portfolio Management Team......Page 66
2.1.3 Research Team......Page 68
2.2.1 Targeting risk-return performance......Page 70
2.2.2 Properties vs. portfolios......Page 73
2.2.3 New vs. existing portfolios......Page 75
2.2.4 Iterative process......Page 77
2.2.5 Property Portfolio Strategy......Page 78
2.3 Strategic Asset Allocation......Page 81
2.3.1 Modern portfolio theory......Page 83
2.3.2 Capital market theory and the Capital Asset Pricing Model......Page 87
2.3.3 Strategic Asset Allocation......Page 90
2.4 Tactical Asset Allocation......Page 91
2.4.1 Spatial based approaches......Page 93
2.4.2 Style based approaches......Page 94
2.4.3 Other approaches......Page 95
2.5 Stock Selection......Page 97
2.5.1 Generic criteria......Page 98
2.5.2 Specific criteria......Page 99
2.6 Asset Identification......Page 102
2.6.1 Market efficiency......Page 103
2.6.2 Information processing......Page 106
2.7 Super REIT......Page 113
2.9 Summary......Page 115
2.10 Key points......Page 117
References......Page 118
3 Dealing......Page 121
3.1.1 Capital Transactions Team......Page 123
3.2 Preliminary Negotiation......Page 124
3.3 Preliminary Analysis......Page 126
3.3.2 Quantitative Preliminary Analysis......Page 127
3.4 Structuring......Page 131
3.4.1 Structuring the commercial transaction......Page 132
3.4.2 Structuring the funding transaction......Page 134
3.4.3 Documenting the proposed transaction......Page 136
3.5 Advanced Financial Analysis......Page 137
3.5.1 Target rate of return......Page 139
3.5.2 Theoretical basis of mis-pricing......Page 144
3.5.3 Pricing models......Page 146
3.5.4 Decision rule......Page 152
3.6.1 Risk-return balance......Page 155
3.6.2 Portfolio metrics......Page 156
3.7 Super REIT......Page 157
3.7.1 Preliminary Negotiation......Page 158
3.7.2 Preliminary Analysis......Page 159
3.7.4 Advanced Financial Analysis......Page 162
3.7.5 Portfolio Impact Assessment......Page 174
3.7.6 Outcomes of implementing the Dealing Stage......Page 175
3.8 Summary......Page 177
3.9 Key points......Page 178
References......Page 180
4 Executing......Page 181
4.1 People......Page 183
4.1.1 Investor Interface Team......Page 184
4.2.1 Delegation of authority......Page 185
4.2.2 Information required by decision maker......Page 186
4.3.1 Commercial Transaction Closure......Page 191
4.3.3 Transaction Closure......Page 192
4.4.1 Negotiation of Documentation......Page 193
4.4.2 Sign-offs......Page 196
4.4.4 Documentation......Page 197
4.5 Due Diligence......Page 198
4.5.2 Operationalising Due Diligence......Page 199
4.6 Independent Appraisal......Page 202
4.6.1 Requirement for appraisal......Page 203
4.6.2 Appraisal issues......Page 204
4.6.3 Appraiser appointment......Page 207
4.6.4 Appraiser instruction......Page 208
4.6.5 Appraisal report......Page 209
4.7 Transacting Phase......Page 210
4.8 Super REIT......Page 211
4.8.3 Documentation......Page 212
4.8.5 Independent Appraisal......Page 213
4.9 Summary......Page 214
4.10 Key points......Page 215
References......Page 217
5 Watching......Page 219
5.1 People......Page 221
5.1.1 Compliance and Risk Management Team......Page 222
5.2 Settlement......Page 223
5.2.1 Settlement check list......Page 224
5.2.3 Settlement......Page 225
5.3.1 Timing......Page 226
5.3.3 Learning process......Page 227
5.3.4 Post Audit......Page 228
5.4.1 Planning......Page 229
5.4.2 Comparative analysis......Page 230
5.5 Performance Measurement......Page 232
5.5.1 Return measurement......Page 234
5.5.2 Performance relative to an index or benchmark......Page 249
5.5.3 Risk measurement......Page 252
5.5.4 Performance Measurement......Page 254
5.6 Portfolio Analysis......Page 255
5.6.2 Attribution analysis......Page 256
5.6.3 Recursion......Page 260
5.6.4 Portfolio Analysis......Page 261
5.7 Super REIT......Page 262
5.7.3 Performance Monitoring......Page 263
5.7.6 Outcomes of implementing the Watching Stage......Page 264
5.8 Summary......Page 265
5.9 Key points......Page 266
References......Page 267
6 Optimising......Page 269
6.1.1 Asset Management Team......Page 272
6.1.2 Property Management Team......Page 273
6.1.3 Facilities Management Team......Page 274
6.2 Asset Management......Page 275
6.2.1 Proactive components......Page 276
6.2.2 Reactive components......Page 280
6.2.3 Asset Management......Page 281
6.3.1 Property Management......Page 282
6.3.2 Facilities Management......Page 283
6.3.3 Outsourcing Property and Facilities Management......Page 284
6.4.1 Refurbishment Transformation......Page 285
6.4.2 Redevelopment Transformation......Page 287
6.4.4 Optional lease related Transformation......Page 289
6.4.5 Transformation......Page 290
6.5.1 Proactive components......Page 291
6.5.2 Reactive components......Page 293
6.6 Disposal......Page 294
6.6.1 Disposal process......Page 295
6.6.2 Disposal method......Page 296
6.6.3 Disposal Step......Page 297
6.8 Super REIT......Page 298
6.8.1 Asset Management......Page 299
6.8.4 Portfolio Rebalancing......Page 300
6.8.6 Outcome of implementing the Optimising Stage......Page 301
6.9 Summary......Page 302
6.10 REIT real estate investment decision making process......Page 303
6.11 Key points......Page 304
References......Page 305
Glossary......Page 307
Index......Page 313