Analyst

Enabling scenario planning and analysis of assets or portfolios of assets you haven’t yet acquired but would like to see the likely effects of acquiring them.

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Analyst is truly unique in an international real estate investment context because it enables the creation of international portfolios that accommodate the various lease structures, differing cost treatments, rent indexation issues and cross border currency conversions necessary to analyse investments across international markets.

In addition to the fundamental data elements that one would expect, Analyst delivers critical key functions such as:

• Transparency of non-recoverable costs
• Statutory lease breaks
• Indexation thresholds
• Indexation holidays
• Indexation ceilings
• Mixed rental indexation and reviews
• Multi-currency portfolios

Analyst is the most comprehensive tool available to investors who need to create accurate cash-flow models for pan-European portfolios of real estate assets.

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In addition to being a powerful analysis tool, Analyst can also act as an information "hub" through which data flows; coming in from external systems and passing out to Excel and other systems. These links are always live and so the information held in Analyst can be automatically refreshed. This eliminates any need for subsequent manual updating of the data after it has arrived from its original source.

Amendments to source data, residing in external systems, are pulled through into Analyst where the original data is refreshed, the user controls which data elements are affected by this change. Alternatively amendments can be made directly in Analyst. The amended data can then be automatically exported into any linked Excel spreadsheets or other external systems.

Analyst, with its dynamic links to Excel, is a powerful and modern business tool that helps to eliminate the significant business risk of manual data manipulation.

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This is a scenario planning tool which enables you to run "what if...?" scenarios to see the results of merging groups of assets at specified times, rates of return, costs of capital etc. This is particularly useful when appraising new assets to see how a purchase would impact upon your existing portfolios.

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"On the fly" appraisals are investment appraisals that are developed dynamically, using live and constantly-changing information, i.e. a property can be sold out of or acquired into a portfolio at any point on the DCF timeline with the impact on the IRR and portfolio valuation instantly visible.

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The DCF function in Analyst displays a rolling exit valuation, which is the value calculated at any particular point in time taking into account capital expenditure and receipts.

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The DCF function in Analyst displays a rolling IRR, which is the return given at any particular point in time should the property be sold at the value shown at that point in time, taking into account capital expenditure and receipts. It allows the user an easy identifiable scale in which to pin point the optimum time in which to sell a particular property.

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The ability to instantly see the origin of a figure in a cashflow, with a single mouse click.

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Analyst is unique in its ability to calculate both an Internal Rate of Return (IRR) and a Modified Internal Rate of Return (MIRR). The IRR calculation alone can exaggerate the average return on an investment since it runs the cash flows forward at an internal rate, the same rate as the overall project. So, for example, if the IRR is 20% in year 10, the cash flows are run forward at 20% for each year 1 through 10.

Because the IRR can exaggerate the average return on investment, Analyst allows you to calculate a modified internal rate of return.

The MIRR calculation uses; a) the initial investment amount; b) a series of projected after-tax cash flows which are projected at a rate that you supply; and c) the after-tax sales proceeds in a given year to calculate a “Future Wealth” amount for years 1 through 10, in the case of a 10 year appraisal. An average year-to-year return is then calculated using the initial investment amount and the Future Wealth amount for each of the 10 years.

MIRR Example: If we are looking at year 5, we would use the initial investment amount, the series of after-tax cash flows for years 1 through 5, the after-tax return on the cash flows based on the interest rate that you supply and the after-tax sales proceeds in year 5 to calculate a Future Wealth amount for year 5. We then take your initial investment amount and the Future Wealth amount that was calculated for year 5 and determine an average yearly return that would be required to accumulate the future wealth amount over the five year period. The MIRR calculation provides a better average return estimate since you supply the anticipated rate of return to run the cash flows forward at. The cash flows are not run forward at an internal rate that could greatly exaggerate your return on investment.

Analyst is unique in calculating both an internal rate of return (IRR) and a modified internal rate of return (MIRR) thus giving an accurate financial picture with no value exaggeration as is often caused by purely IRR appraisals.

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