Real Estate & Commerical Property

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1 The specialist in highly technical, market-driven Real Estate & banking Commerical and corporate Property finance training Real Estate & Commerical Property Business Finance Valuation Courses Courses All courses can be presented In-House or via Live Webinar web: redliffetraining.co.uk phone: +44 (0)

2 Advanced Negotiation Issues in M&A Brochure Content Location: London Date: Standard Price:...+VAT Membership:... PUBLIC COURSES BOOK NOW Course Overview Commercial Real Estate Debt Finance Advanced Negotiation & Structuring Issues in Real Estate Finance Term Sheets Drafting & Negotiating Issues in Real Estate Finance Documentation Intercreditor (&AAL) Issues in Leveraged, Real Estate and ABL Transactions Loan Documents and Security Issues Advanced Negotiation Issues in Financial Covenants Real Estate Modelling Joint Ventures UK Commercial Property Understanding The Tax Issues IN-HOUSE COURSES Islamic Finance - Real Estate: The Halal Way Real Estate Investment Strategy IFRS Accounting for Real Estate Real Estate Finance for Commercial Lenders - Investment Lending Real Estate Finance for Commercial Lenders - Residential Lending Housing Finance Real Estate Investment & Management - South Africa Real Estate Investment & Management - Hong Kong Real Estate Investment & Management - UAE Real Estate Valuation - South Africa Real Estate Valuation - Hong Kong Real Estate Valuation - UAE To book this course or find out more, please click the Book button

3 Corporate Membership Scheme Our Corporate Membership Scheme gives clients the benefit of discounted course places with absolutely no restrictions. Clients pay an annual subscription fee of VAT to receive 20% discount on all public course and conference bookings irrespective of the numbers booked. You Corporate Membership Scheme can be used once payment is received and will be valid for one year. Our Corporate Membership Schemes are not valid on any courses held on an in-house basis and are in line with our standard Terms & Conditions If you would like to enquire about one of our Corporate Membership Schemes then please call or us for more information. enquiries@rtlimited.co.uk Tel: +44 (0) web: redliffetraining.com enquiries@redcliffetraining.co.uk phone: +44 (0)

4 Commercial Real Estate and Debt Finance Location: London Date: 29 Nov 2018 Standard Price: 575 +VAT Membership: VAT Background of the trainer BOOK NOW The Trainer has over 40 years experience in banking, finance and financial training. He has had practical banking experience with major banks in the areas of corporate credit analysis, Corporate Banking Relationship Management and Commercial Real Estate Debt Finance. The trainer was subsequently involved in Commercial Real Estate Financial Advisory business with a then newly formed financial services subsidiary of one of the world s largest Real Estate advisory firms. The Trainer has almost 25 years financial training experience in about 60 countries focused on large scale Corporate Credit Analysis, Corporate Banking and Structured Debt Finance (Project, Infrastructure and Real Estate Finance). He holds an MSc Real Estate Investment and Finance degree from the University of Reading (2014). The trainer has worked with participants in a wide range of job functions and experience from Commercial and Investment Banks, Development Finance Institutions, Export Credit Agencies, Public Sector organisations and large corporates. Course Overview Commercial Real Estate is a major investment Asset Class, represents a very substantial portion of corporate assets and provides collateral and credit support for a huge volume of bank and Capital Markets financings, ranging from lending to the SME sector to Commercial Mortgage Backed Securitisations. Moreover the Real Estate markets are extending from traditional investment categories such as offices and retail to now include increased interest in areas such as distribution centres, hotels and Private Residential Rental properties and student accommodation. Risks: Commercial Real Estate values are very sensitive to the underlying economic fundamentals as well as the financial markets. With interest rates in the US, UK and the Eurozone starting to rise, there are concerns that this will adversely impact Commercial Real Estate values. Additionally Commercial Real Estate values and performance are also influenced by specific factors such as the quality of the Real Estate, lease terms, tenant risk, market sector and geographic focus making it essential to understand the specifics of each Commercial Real Estate Asset. Objectives of the training: By the end of this course, participants will be able to: Assess the key risk issues in Commercial Real Estate Finance Understand the main approaches to the valuation of Commercial Real Estate Illustrate, through financial sensitivity analysis, the impact of key drivers on the viability of a Commercial Real Estate Finance transaction Discuss and evaluate the principal methods for mitigating risks in Commercial Real Estate Finance transactions Understand the key features of the principal debt financing products and their relative advantages and disadvantages Understand how value is created in Commercial Real Estate transactions and risk and return issues from a debt and equity perspective Course methodology There will 1 or 2 core case studies involving large value Commercial Real Estate transactions throughout the training, using the example of a single asset financing, supplemented by other cases / exercises to illustrate specific issues in the programme. Whilst there will brief reviews of a financial model for a core case study, for participants seeking to develop their financial modelling skills Redcliffe Training provides Real Estate modelling training programmes. Target Audience This programme is designed for personnel working on large scale Commercial Real Estate transactions, with limited or no practical experience of the practical aspects of Commercial Real Estate Finance, working in organisations such as Project developers and investors Commercial and Investment banks Commercial Real Estate Debt Funds Private Equity firms investing in Real Estate Sovereign Wealth Funds Construction companies Accountancy firms Law firms Real Estate advisory firms Architectural practices and Quantity Surveying firms Participant pre requisites It has been assumed that participants will have limited or no prior practical experience of Commercial To book Real this Estate course Finance. or find out more, please click the Book button

5 Commercial Real Estate and Debt Finance Location: London Date: 29 Nov 2018 Standard Price: 575+VAT Membership: 460 BOOK NOW Course Overview Participants should already be familiar with the core principles of financial analysis, the fundamental principles of investment appraisal techniques, the core functions in Excel and the main features of debt financing products. Case studies To maximise the benefit to participants case studies will Mostly focus on the main types of Commercial Real Estate office, retail and industrial Concentrate on large scale transactions Primarily relate to the financing of single asset companies, both developments and existing investments. There will be limited coverage of Commercial Real Estate companies and Investment vehicles Each participant will be required to bring a laptop to the course Risk and risk mitigation techniques; overview of developments in the Commercial Real Estate markets Macroeconomic cycles what can be learned from past economic cycles? Recent developments and issues arising from the credit crisis Key risks and mitigants in Commercial Real Estate Financings Will technology fundamentally change the Commercial Real Estate markets? Exercise: Review of a commercial real estate financing to identify key credit risks and potential mitigants Principles of Commercial Real Estate Valuation Summary of Commercial Real Estate valuation methods and how the different methods can influence value Comparable buildings Capitalisation of yields Open Market Values Discounted cashflow valuation methods Occupational lease terms examples from selected markets, and how this affects value Yields in Commercial Real Estate Valuations Initial yields Reversionary yields Equivalent yields Development vs investment financings, and factors to consider in valuation assumptions Exercise: Calculating and sensitising Commercial Real Estate Finance valuations using discounted cashflow techniques Commercial Real Estate Companies and Investment vehicles Typical types of Commercial Real Estate investment companies and their approach Developers Trading companies Investment companies Real Estate Investment Trusts (REIT) vs non REIT Commercial Real Estate Funds What are the key elements of a creditworthy Commercial Real Estate company principal elements in credit rating Exercise: Review of key aspects of the financial statements of a Commercial Real Estate Company or REIT Debt financing choices for Commercial Real Estate transactions and debt structuring issues Financing choices Private debt financing choices Development vs investment financings Asset specific financing Secured vs unsecured debt Senior vs subordinated / mezzanine debt Sale and leaseback transactions To book this course or find out more, please click the Book button

6 Commercial Real Estate and Debt Finance Continued... BOOK NOW Capital markets financings Use of hybrid financings convertible bonds Commercial Mortgage Backed securitisations review of a Commercial Mortgage Backed Securitisation Case Study: participants review and sensitise a financial model with a view to developing an acceptable debt structure for a Commercial Real Estate project Risk and return in Commercial Real Estate Finance the equity investors perspective Principles of evaluating investments discounted cashflow methods, NPV and IRR Value creation the development process; active Real Estate management; financial market influences, how different types of investor seek to achieve returns from Commercial Real Estate investments Risk and return Commercial Real Estate Finance vs other asset classes Use of Equity vs. Subordinated Debt Case Study: sensitising a financial model for a Commercial Real Estate project to illustrate the sensitivity of equity related returns to key assumptions Debt structuring issues and risk mitigation techniques Use of covenants and developing a covenant package Debt Service Coverage measures (interest and debt service coverage) Asset Coverage measures (Loan to Value ratio and top up requirements) Development vs. investment financings completion and cost overrun undertakings Third party credit support Case Study: participants review the key elements of a summarised Term Sheet To book this course or find out more, please click the Book button

7 Advanced Negotiation & Structuring Issues in Real Estate Finance Term Advanced Negotiation Issues in M&A Sheets Date: Date: 13 Jun 2018, 17 Oct 2018 Location: London Standard Price:...+VAT Location: London Standard Membership: Price: 695+VAT... Membership: 556 +VAT BOOK NOW BOOK NOW Course Overview Course Overview THIS COURSE IS PART 1 OF A TWO PART COURSE, THE SECOND PART IS TITLED DRAFTING & NEGOTIATING ISSUES IN REAL ESTATE FINANCE DOCUMENTATION. It is highly recommended that participants attend Part 2 of this course after attending this Part 1 as the content in Part 2 is a follow up from Part 1 and covers all the salient issues related to real estate finance documentation that can not be covered in Part 1 due to time contraints. This course covers the various methods of investing in Real Estate Finance including the various structures used and negotiating the real estate finance term sheets including discussions relating the bidding process and issues to consider relating to leveraged deals, large loan portfolio sales and/or acquisition of distressed assets including exit strategies and/or bridge take-outs. It is relevant for in-house lawyers and private practice lawyers alike and bankers involved in negotiating real estate finance term sheets, complex structuring involving real estate finance, leverage finance or acquisition finance, securitisation particularly CMBS, lending/banking documentation teams, structurers, commercial real estate origination teams including originators, the sales team, commercial real estate investors and borrowers as well as accountants who advise clients on real estate finance transactions or structured transactions with an element of commercial real estate finance. Whilst this is not a fully fledged course on Leverage Finance or Acquisition Finance, this course is also relevant to private equity houses, investors, commercial banks, wealth fund managers and hedge funds involved in loan portfolio sales backed by commercial real estate including sale and purchase of distressed assets. We start off this course setting the scene by discussing the various methods of investing in real estate finance and go on to cover the various typical structures including the key features of the Opco/ Propco structure, REITs, Investment Finance and Development Finance. We discuss term sheets in general, the binding and non-binding terms and the points of negotiation from a lender s perspective, a borrower s perspective and some general points to bear in mind when drafting. We cover the key elements of a real estate finance term sheet LMA version. For those of you likely to be involved in submission of bids for purchase of loan portfolios backed by real estate, we cover aspects of the bidding process in detail including commitment letters/mandate Course letters or Content the softer highly interest/confident letters, the heavily negotiated clauses and points, due diligence and the various documents and ancillary documents to be agreed. We map out the timeline and finish off this section by discussing distressed assets sale and acquisition. Additionally, we will cover the various exit strategies used for bridge finance take-out and/or to get further financing including full syndication, securitisation and tap issues to raise more financing. We will undertake an Interactive Group Case Study during this course whereby participants will be placed into various groups to negotiate the terms of financing and a term sheet for a real estate finance transaction. Complimentary materials will be provided to all participants. Methods of Investing in Real Estate Real Estate Investment Structures Types of Finance The Lending Structure ӹӹinvestment Finance Structure & Key Features Security Package & Guarantees Drawdown, Repayment & Prepayment Interest Bank accounts ӹӹdevelopment Finance Structure & Key Features Security Package Collateral Warranties and Guarantees Drawdown, Repayment & Prepayment Interest Bank accounts Flexible Financing Arrangements Islamic Finance Structures Sale and Leaseback ӹӹopco/propco Structures Ring fencing To book this course or find out more, please click the Book button

8 Advanced Negotiation & Structuring Issues in Real Estate Finance Term Advanced Negotiation Issues in M&A Sheets Location: London Date: Standard Price: Continued...+VAT Membership:... BOOK NOW BOOK NOW Course Overview Syndication Bridge take-out REITs ӹӹform of a UK REIT ӹӹthe conditions ӹӹbreach ӹӹringfence ӹӹproperty Rental Business ӹӹtax treatment Property Derivatives China Real Estate Market Compared to the US Term Sheets What is a Term Sheet Reasons for having a Term Sheet Process and Timing ӹӹduty to negotiate in good faith Case law Binding terms Negotiation Guidelines Borrower s perspective Lender s perspective General points to bear in mind Loan Portfolio Sale The Bidding Process Commitment Letters Highly Interested/Confident Letters Due Diligence Documents Negotiations ӹӹmac clause ӹӹmarket Flex clause ӹӹclear Market provision Reliance Letters Legal Opinions Reports and Audits Timeline Acquiring Distressed Portfolios Exit Strategies/Bridge Take-out Syndication Securitisation Real Estate Finance Term Sheet - LMA Section 1 Senior Facility Terms Security Repayment, Prepayment & Cancellation Course Bank Content Accounts Representations & Warranties Undertakings Events of Default Conditions Precedent Section 2 Mezzanine Facility Terms Bank Accounts Cross Defaults Costs and Expenses Section 3 Intercreditor Agreement Terms Security Ranking Payments & Cure Periods Security Enforcement Waterfall Group Case Study: Participants will work together to negotiate the terms of financing and a term sheet for a real estate finance transaction. Groups will be assigned different roles e.g. banker, sponsor, lender, seller). What s the best deal you can negotiate? To book this course or find out more, please click the Book button

9 Drafting & Negotiating Issues in Real Estate Finance Documentation Location: London Date: 29 June 2018, 18 Oct 2018 Standard Price: VAT Membership: VAT BOOK NOW Course Overview THIS COURSE IS PART 2 OF A TWO PART COURSE, THE FIRST PART IS TITLED ADVANCED NEGOTIATIONS & STRUCTURING ISSUES IN REAL ESTATE FINANCE TERM SHEETS. It is highly recommended that participants attend Part 1 of this course prior to attending Part 2 as the content is a follow up from Part 1 and will not be repeated or summarised again in Part 2 due to time contraints. This course provides full coverage of the important aspects of drafting and negotiating real estate finance documentation. It covers topics from drafting or negotiating the REF Facility Agreement, the Security Documents, the Hedging Documents to a discussion around the issues related to Intercreditor Arrangements and Legal Opinions. It is relevant for in-house lawyers and private practice lawyers alike and bankers involved in complex structuring involving real estate finance and real estate finance documentation, lending/ banking documentation teams, structurers, commercial real estate origination teams including originators, the sales team, commercial real estate investors, developers and borrowers as well as accountants who advise clients on real estate finance transactions. Initially we set the scene by going through the property related issues around due diligence and covenant of title. We then go through the key parties and documents involved in a typical real estate finance transaction. We then cover the drafting and negotiating points involving the REF Facility Agreement, including the drawdown mechanics, conditions precedent, representations and warranties, covenants and events of default. We then cover the Security Documents and discuss the issues around taking security, perfection and enforcement of security and cross-border security. The Intercreditor Arrangements are discussed including the key provisions for negotiation, cure rights etc. followed by the coverage of the ISDA Master Agreement provisions to be aware of when drafting and negotiation real estate finance documentation. Additionally, we will cover legal opinions and discuss what banking lawyers should consider for specific FATCA drafting. Property Due Diligence Purpose Scope Materiality Investigation of Title Certificate of Title Warranties, Indemnities & Disclosure Due Diligence Questionnaire Due Diligence Report Covenant of Title Full Title Guarantees Limited Title Guarantees Subject to and actual knowledge Key Parties Involved Borrower entities Syndicate of Lenders Other Parties: Investment Finance Development Finance Key Documents Facility Agreement Duty of Care Agreement Property Documentation Report on Title Certificate of Title Security Documents Valuation Report Insurance Report Environment Report To book this course or find out more, please click the Book button

10 Drafting & Negotiating Issues in Real Estate Finance Documentation Continued... BOOK NOW Drafting or Negotiating a REF Facility Agreement Conditions Precedent For Investment Finance ӹӹvaluation & Survey ӹӹinsurance ӹӹtitle ӹӹsecurity ӹӹmanagement ӹӹtax Additional CPs for Development Finance ӹӹinsurance for additional parties ӹӹdevelopment Documentation ӹӹsecurity Prepayments & Cancellations Mandatory Prepayments Change of Control Break costs Interest Provisions Interest Periods Hedging Calculation of Interest Default Interest Valuation Provisions Definitions Costs Representations Bank Account Provisions Rent Account Deposit Account Disposal Account VAT Account General Account Retention Account Representations & Warranties For Investment Facilities ӹӹtitle ӹӹlegislation ӹӹsecurity ӹӹuse & Condition ӹ ӹ Reports For Development Facilities ӹӹon the Development On the Development Documentation When made and by whom Qualifications Common Negotiating Points ӹӹfor Lender ӹӹfor Borrower Covenants Information Covenants Financial Covenants Property Covenants Development Covenants General Covenants Common Negotiating Points ӹӹfor Lender ӹӹfor Borrower Events of Default Standard Events of Default Compulsory Purchase Major Damage Headlease Insolvency of Significant Tenant Abandonment Completion Step-in Agreements Common Negotiating Points ӹӹmaterial Adverse Effect ӹӹthresholds Cross Defaults etc. ӹӹqualifications Drafting or Negotiating the Security Documents The Security Package Covenants Taking Security Land Shares Bank Accounts Fixed vs Floating Charge Contractual Rights Insurance Policies Development contracts and collateral warranties Perfection of Security Enforcement Cross Border Security Intercreditor Arrangements Key Provisions for Negotiation Priority of Payments Other Rights Documenting Derivatives in Loan Transactions ISDA Master Agreement and Schedule Events of Defaults Additional Termination Events Specified Entities Notional Reductions Collateral Legal Opinions What legal opinions should cover Foreign Legal Opinions To book this course or find out more, please click the Book button

11 Intercreditor (& AAL) Issues In Leveraged, Real Estate and ABL Transactions Date: 18 Jun 2018, 01 Oct 2018, 30 Nov 2018 Location: London Standard Price: VAT Membership : VAT BOOK NOW Course Overview Intercreditor Agreements come to the fore in distress and restructurings. In essence their aim to provide lenders with the tools to implement an orderly restructuring by mimicking some (but not all) of the features available under Chapter 11. In particular, ranking/priority available under the Absolute Priority rule (recently reaffirmed in the Jevic case), enforcement standstills (especially junior lenders), payment stop notices, turnover process and the ability to sell assets free of collateral (the so-called intercreditor release mechanism which featured in the European Directories case). The course reviews the key aspects of typical Intercreditor agreements, especially the various LMA precedents for leverage loans, pari-loan/bond deals and real estate transactions. However, as the LMA acknowledges, their precedents are simply a point of departure so the programme also reviews other approaches found in the market. Moreover the LMA does not yet boast a precedents for transactions which include ABL or Unitranche deals (although the latter is in the works at present). Dovetailing ABL with other forms of debt has proved problematical outside the EU so the course calls on the presenter s expertise to consider some solutions to this issue. This course will provide participants with an understanding of the role of the key intercreditor and how these tools are used in practice. The course also covers related aspects of topical issue of value and price which was central in both the IMO Carwash and the Stabilus cases. The role and importance of the Facility And Security Agents is also considered. Introduction to Ranking and Subordination techniques Summary of key terms of relevant Junior debt instruments Mezzanine Second Lien Loans & Notes Subordinated/Unsecured Notes PIK Loans & Notes Methods of creating ranking/subordination Taking collateral / security Contractual Structural Temporal Equitable subordination (US, Germany, Spain, France, Italy) Relevant LMA precedents and market documentation 2012 Leveraged precedent SSRCF 2013 version for pari Loan Bond structures The Real Estate intercreditor precedents Structural & Contractural The LMA ICA as a point of departure for negotiations Agreement Amongst Lenders ( AAL ) no standard approach! Review of relevant deal structures Traditional senior loan vs. mezzanine, shareholder loans Legacy deals - senior, 2nd lien loans, mezzanine, shareholder loans Pari-Senior Loan/Bond structures ( Loan and Note ) Real Estate transactions Unitranche / direct lending structures Asset Based Lending structures Ranking & the Payment Waterfall: general approach Who should be a party to the ICA Problems with Shareholder Loans Ranking of the various layers of debt Typical ranking Position of hedge liabilities Dealing with intra-group & parent liabilities Issues arising in re Loan notes, Equity substitutes, Vendor loans Rationale for inclusion as parties to the Intercreditor Rationale for exclusion as parties in the Intercreditor Position in pari Loan / Bond structures Ranking as to Payment Permitted Payments on Hedge Liabilities Permitted payments & restrictions on Mezzanine To book this course or find out more, please click the Book button

12 Intercreditor (& AAL) Issues In Leveraged, Real Estate and ABL Transactions Continued... BOOK NOW Mezzanine Payment Stop Notice Potential abuse and cure Mezzanine Debt purchase by sponsor Ranking as to Proceeds of Enforcement of Transaction Security Senior Facility Liabilities - Restrictions and Permissions Security and guarantees/indemnities - Senior Lenders Enforcement of Security Who can Enforce importance of the Instructing Group Instructing Group in Senior loan v Mezz structures Instructing Group in pari Loan / Bond Structures Role of the Security Agent Timing of Enforcement standstills Enforcement standstills Senior loans vs. mezz pari Loan / Bond structures When can Mezz and other junior lenders Enforce? Problem areas re Enforcement Timing, manner of Enforcement Role of the Security Agent in Enforcement Lessons from Saltri v MD Mezzanine (Stabilus) case Non-Distressed disposals Application and scope Non-Distressed defined Interaction with the Senior Facilities Agreement Interaction with the Mezzanine Agreement Release of Security Waterfall of Disposal Proceeds Position in pari Loan / Bond structures Covenants in High Yield Bonds affecting Disposals Reconciling conflicts in pari Loan / Bond structures Distressed Disposals Release of Guarantees and Security What can be released? Circumstances in which the junior lender s claims can be discharged Lessons from the European Directories case Valuation issues Price vs Value Lessons from IMO Carwash case what went wrong (and how to fix it) A closer look at Stabilus is this more instructive? Valuation approach going concern vs. liquidation Valuation method - problems with traditional approaches in distress Fair value defined Approaches per the 2012 LMA ICA Potential problems with Fair Value (why fair may not be fair ) What is a Competitive Sales Process? Solutions for Junior lenders re Fair Value Form of consideration; cash vs. non cash consideration Credit bidding Is it available under the Intercreditor The Stabilus position Credit bidding in action Potential pitfalls Interaction of cross-default vs. crossacceleration between senior & junior Implications for EoD under the SFA on the Mezzanine Trigger options for Mezz EoD SFA EoD, Default or Acceleration Limit to specific Events / covenants Typical carve-outs Position in pari Loan / Bond structures Potential solutions Issues with Hedging & Hedge parties Definitions relevant to Hedging Close-out Netting Senior Credit Participation Voting pre-close out key issues Post close out - inclusion in Majority Senior Lenders Option to Purchase & Turnover Key terms How effective is this remedy: Examples in practice Lessons from IMO Car Wash Does Stabilus change things Approach in pari-loan/bond structures Is it workable solution? Current market trends / wish-list for Mezzanine Turnover per and post enforcement Key differences between the Leveraged and Real Estate Intercreditor Differences in deal structure and ramifications Approach to security Issues with the Security Agent Dealing with Hedging Acquisition of shares in the mezzanine bor- To book this course or find out more, please click the Book button

13 Intercreditor (& AAL) Issues In Leveraged, Real Estate and ABL Transactions rower Cure rights a different approach Release of security and disposals Intercreditor issues in Asset Based Lending structures Key concerns of ABL lenders Key concerns of the other finance parties (high yield, unitranche, Loans) Interaction with ABL Facilities (Algeco Scotsman) Intercreditor issues in ABL Standstills Enforcement Dealing with pools of collateral Possible solutions in the European context Issues in Agreement Amongst Lenders Use and application (lessons from America?) Intercreditor vs AAL Issues in the AAL Problems for borrowers Inter-creditor issue re additional debt Should the new debt be subject to an intercreditor Issues with Secured Debt Accordions vs Incremental Equivalent Debt Issues with Unsecured debt Documentary options upfront ICA or deferred? Intercreditor issues arising from US parties / security Terms to include in LMA / European Intercreditor Bankruptcy waiver Automatic Acceleration Separate security EU terms to include in NY style Intercreditor Release / Assignment of claims on sale or enforcement Payment subordination Continued... BOOK NOW To book this course or find out more, please click the Book button

14 Loan Documentation & Security Issues Date: 11 Jun 2018, 18 Sep 2018, 05 Nov 2018 Location: London Standard Price: VAT Membership: 580 +VAT BOOK NOW Course Overview The programme will review the impact of the draft ECB guidance on leveraged transactions. This course provides a full coverage of all of the important aspects of lending. It sets the scene by explaining the banks approach to lending, the roles of the key departments in the bank and the key documents in the process. The programme then proceeds to discuss where to focus in analysing the loan and examines the key commercial terms in the loan and security documents from the perspective of both the lender and the borrower. Reference is made to established case law (Spectrum) and to recent cases, such as Stabilus and Urvasco and their relevance to key clauses and aspects. Whilst Loan Market Association precedents are widely used as a point of departure for loans throughout Europe, there are a number of key clauses which are left blank for negotiation, in particular the various permitted baskets which need to be tailored on a case by case basis. Furthermore, syndicated (and club) loans raise additional issues which are not relevant in bilateral loans, such as voting thresholds and transfer restrictions. In view of the standardised approach to lending across Europe, the course is presented so that it has a pan-european relevance. The course will also discuss briefly the potential impact of Brexit on existing and new documentation. The longer term impact on loan documentation will depend upon what is agreed between the UK and the EU. Facilities in general Investment grade vs high yield - key dividing line in credit markets, why & how it matters Preliminary issues for the borrower the 7 key aspects Types of bank facilities & key issues Committed vs uncommitted facilities Overdraft, term loans, RCFs, multiple option facilities, swingline facilities Obtaining a loan - bi-lateral vs club vs syndicated deals Key differences Repayment styles and what drives them Amortising vs balloon vs bullet Lenders approach to amortisation Overview: Key documents & their uses Commitment and mandate Letter Term sheet Fee letter The loan facility agreement Security documentation Case Study: Review key aspects of a sheet in the context of a relevant deal including the market flex The key players in a loan & their roles Dramatis personae in the loan (bilateral, clubs & syndicated) The mandated lead arranger Origination & syndication departments Credit department Portfolio department The facility agent & security agent key lessons from the Stabilus case Issues relevant to syndicated (& club) deals The various types of Lenders & what they want Banks, CDOs, institutional lenders, credit & hedge funds, direct lenders Role and importance of The Instructing Group Critical voting thresholds Transfer restrictions General approach to the loan The Lender s approach to the Loan The borrower s aims Interplay of the various models/scenarios How to read a loan facility agreement What to do and what not to do What are the key areas to focus on Generic drafting issues Materiality Reasonableness De minimis / permitted baskets Other conditional clauses (might, may, will, would etc) Further assurances provide less assur- To book this course or find out more, please click the Book button

15 Loan Documentation & Security Issues Continued... BOOK NOW ance since Ford v Polymer Vision Negotiating tactics in handling the banks What do the lenders want the 3 key areas Knowing where to focus your negotiating firepower How to handle the lenders when things go wrong Different types of facilities use and key issues Overdraft - why these are unsuitable for corporates Term Loans Uses general corporate purposes, M&A, capex Typical terms Tranching and alphabet notes rationale and use Revolving credit facilities Typical terms & problem areas Fee /margin structure what s market for committed amounts Clean-downs why they matter, what to look for Rollovers & cashless rollovers (lessons from Lehman) Dealing with headroom The senior facility agreement the key commercial terms Primary loan senior facility agreements when and where are they used Scope of the Loan the Restricted Group - where and why it matters Permitted baskets what they are and why they matter Interest & fees Arrangement fees Commitment fees Typical margins Utilisation periods Use and interaction with hedging (SWAPS) Default vs. events of default and cross default LMA approach vs market Impact of a breach; theory vs practice Covenants generally Information General undertakings (the negative pledge & guarantor coverage test) Financial covenants typical covenants MAC / MAE Does it matter Impact of the recent Urvasco case Debentures defined (UK only) Companies Act (UK) approach vs case law (impact of recent Fons case) Mortgages Charges fixed vs floating Key differences Key issues for lenders & why it matters (Spectrum & Brumark Cases) Pledges Liens Security re intellectual property and contracts Security in the EU general approach Parallel debt arrangements Collateral in the US general approach Case Study: Discuss some of the key issues affecting security from both lender s and borrower s perspective Registering & perfecting security Registering security interests created by companies & LLPs Charges created on or after 6 April 2013 Charges created before 6 April 2013 Charges created by overseas companies Registering security over land Registering security over intellectual property Priority between company mortgages and charges Methods of perfecting security The five key questions Impact of Brexit on loan documentation Events of default Mandatory prepayments (illegality) MAC clauses Force majeure Other matters (repeating reps, gross up) Passporting issues Governing Law and Jurisdiction Case Study: Discuss specific terms in the Senior Facility Agreement specifically various formulations of the MAC clause, the maintenance covenant package (which ones should be used and why), the role of the Permitted baskets Types of security To book this course or find out more, please click the Book button

16 Advanced Negotiation Issues in Financial Covenants Location: London Date: 12 Jun 2018, 24 Sep 2018 Standard Price: VAT Membership Price: VAT BOOK NOW Course Overview The loan market in Europe has bifurcated into two main approaches to loan documentation; smaller club and bilateral deals on the one hand, which broadly follow the more lender-friendly LMA approach, and larger syndicated TLB-style deals on the other hand which are increasingly influenced by high yield bonds and invariably are structured on a cov-loose or cov-lite basis. These larger deals also include a far more eclectic approach to the key definitions comprising the ratios with many add-backs taken copied from high yield bonds. This programme covers financial covenants in leveraged loans and real estate deals and includes specific reference and analysis of the covenants, terms and definitions in the LMA Senior Facilities Agreement for Leveraged transactions and LMA Real Estate precedents. The programme uses information from the Debt Explained database, to review the current trends in the market in the larger syndicated (TLB-style) deals which so often include springing leverage covenants and high-yield-bond style covenant packages. The larger syndicated TLBs also vary in approach depending on whether they apply English law or NY law (for example, the latter do not usually permit overcures or require prepayment of loans from equity cure cash). Direct lenders, which typically use the LMA leverage precedent as a starting point, also tend to adopt a more borrowerfriendly approach to the terms in the loan and the financial covenants. Financial covenants are arguably one of the most heavily negotiated aspects of the Loan Agreement. Too often; some parties fail to understand the key negotiating issues that really matter, for example they view the financial covenants in isolation rather than appreciating that they must be seen in the context of the particular capital structure. Secondly, too much time is spent on which covenants apply rather than focusing on the key constituents of the key terms in the financial covenant. Finally, many parties fail to appreciate that, even in covlite deals, the financial covenants and/or the components of those covenants play an important role as they also affect a wide range of other critical matters in the loan. This usually includes the various permitted actions such as debt incurrence (security and guarantees), sponsor payments, cash sweeps, guarantor coverage and grower, scalable and/or builder baskets where these appear. This course provides a detailed look at commercial aspects of financial covenants and looks under the bonnet at the critical issues that arise in practice. It provides an in-depth look at the covenants as set out in the Loan Market Association precedent together with other covenants that might be used in practice. Reference is made to the Debt Explained loan database which tracks key terms in the larger syndicated TLB market. Participants will gain an in-depth view of which covenants should be used together with a detailed analysis of the constituents of the covenants and the sponsor friendly add-backs and other sponsor friendly techniques used by borrowers to manipulate the covenants. The programme will appeal to practitioners involved in leverage, real estate and infrastructure, such as Lawyers, Private Equity professionals, Bankers in Lending (all departments), Corporate financiers, M&A advisors, Debt advisory and Restructuring. Accounting professionals looking to expand their knowledge of this topic will also benefit as many of the issues embrace legal /documentary considerations. The programme adopts a pan-european approach to the topic but the presenter is able to discuss issues relevant in the USA in view of his exposure to those markets. To derive full benefit from the programme, it is essential that attendees have a basic understanding of the main / headline elements of a Profit and Loss account (Sales, EBITDA, EBIT etc) and a basic understanding of the differences between P&L /Accrual Accounting and Cash accounting. It is emphasised that participants DO NOT require an understanding of IFRS or GAAP. A short module summarising the key differences between P&L /Accrual Accounting and Cash Accounting is available on request prior to the programme. The programme will review the draft ECB guidance on leveraged transactions published in November The course will examine which type of transactions are covered, which lenders are affected, the approach to EBITDA and the potential implications for players in the debt markets. Case Study: Participants will be required to:- (a) calculate how to derive the key elements of the various covenants (b) identify some of the more problematic components in the covenants (c) calculate the various covenants and (d) explain the pros and cons of each of the covenants and why they may be appropriate for one deal but not another. The calculations are relatively simple and are designed to explain the basic principles and reinforce learning. To book this course or find out more, please click the Book button

17 Advanced Negotiation Issues in Financial Covenants Continued... BOOK NOW Introduction - Interaction of capital structure & financial covenants Types of instruments & impact on the financial covenants What is the purpose of financial covenants Relevance of Capital Structure on Financial Covenants Bullet loans Impact of PIK How the lenders and borrwers approach setting the Financial Covenants Key financial ratios used by Lenders and typical LMA ratios in leveraged deals Market based financial ratios The four LMA covenants in leveraged deals Leverage ratios (Balance sheet and P&L ratios) Total Debt / EBITDA Senior Debt/ EBITDA Interest coverage ratios EBITDA / Total interest EBITDA / Senior Interest EBITDA / Cash interest [EBITDA Maintenance Capex] / Cash Interest [EBITDA Capex] / Cash Interest Cash flow cover (DSCR) CADS / Total Debt Service CADS / Senior Debt service Capex covenant LMA vs Market approach Carry forward / carry back amounts - LMA vs Market approach Add-backs LMA vs Market Calculation of EBITDA and Cash flow EBITDA Simplistic calculation of EBITDA Consistency of application (Accounting changes under IFRS, GAAP etc) Exceptional items LMA approach, UK GAAP vs IFRS Discontinued Operations LMA, different approaches of UK GAAP vs IFRS Derivative & Financial Instruments - UK GAAP vs IFRS Pension Items - UK GAAP vs IFRS Current trends affacting EBITDA (aggressive add-backs) Anticipated synergies and cost reductions What are the typical requirments for anticipated synergies Business optimisation expenses Run-rate EBITDA how is this calculated Definition of Cash flow Typical adjustments Sponsor friendly adjustments Potential problems with cash-flow Calculation of Debt and Borrowings and Finance Charges Total [Net] Debt and Senior Total [Net] Debt Borrowings per the LMA Simplistic calculation of Net Debt Example of net debt items Treatment of PE Debt Vendor Loans do they matter Impact of Debt Buybacks and impact on Debt Treatment of trapped cash on Debt What does senior only exclude? What about PIK loans should they be included in Total Debt? Borrowings Treatment of receivables Redeemable shares Sweeper clause Finance charges & Net Finance Charges Impact of PIK Hedging impact Finance Leases v Operating Leases problem areas Current approach Impact of proposed changes to IFRS Which sectors will be affacted by the changes Potential problem areas (& solutions) with the new regieme Sectors posing particlar problems with operating leases Current market trends Key differences between large vs mid cap vs smaller deals Cov-lose Use and application Typical ratios Cov-lite Use and application Typical ratios Springing Leverage covenants When should the ratio spring Calculating the constituents of the covenants When is the covenant tested Potential problem areas Application and compliance with the Financial Covenants How many covenants are needed To book this course or find out more, please click the Book button

18 Advanced Negotiation Issues in Financial Covenants Continued... BOOK NOW Which companies should be included Definition of Group Adjusted EBITDA (effect of acquisitions & disposals) Dealing with short periods (i.e. less than 12 months post the deal) Periods shorter than 12 months Typical pitfalls to avoid Frequency of application: When should the ratios be tested Historic TTM/LTM, forecast, both (quarterly, monthly) 2 options per LMA What level of Headroom is appropriate What s market When and why does headroom matter Impact of Clean-ups The Compliance Certificate Typical requirements per LMA Sch 9 Current commercial requirements Traps for borrwers When does the breach occur Ramifications of the breach for Lender (traps to avoid) Equity cures Equity cures - What are they, good or bad What should be cured (EBITDA, Cashflow, Debt) Treatment of overcures Is the cure EBITDA? And if yes what effect will this have How should the cash be used? (Why repayment of debt is not appropriate) Deemed cures what are they and are they worth having? Review of recent lessons from Ideal Standard aspects of the loan facility Aspects of the loan affected by Leverage test Margin ratchets Cash sweeps Debt incurrence (Incremental/Accordion facilities) Aspects of the loan affected by the defintion of EBITDA Material subsidiaries and their relvance Guarantor coverage test Impact and relevance on Grower, Sclable and Builder baskets Key differences Impact on and relevance to the loan facility Draft ECB Guidance on Leveraged Transactions Which lenders are affected Which deals are affected EBITDA calculation Ramifications for market players Appendices (Not covered in the course but included in an appendix the materials) Overview of ratios used in Project finance / Infrastructure Annual Debt Service Coverage ratio ( AD- SCR ) Loan/Bond Life cover Project Life cover Using the Buffer test Covenants used in Real Estate deals The LMA financial covenants Interest cover constituents, pros and cons Historical Projected Key differences from the leveraged ratio Calculation periods Passing Rental what is included and what is excluded Difficult / contentious aspects - break clauses, non-rental income, costs/expenses Finance costs treatment of hedging Loan to Value Constituents, pros and cons Items to be netted off Impact of the Financial Covenants on other To book this course or find out more, please click the Book button

19 Location: London Real Estate Modelling Date: Nov 2018 Standard Price: 1,300 + VAT Membership Price: 1,040 + VAT Course Overview BOOK NOW Course Methodology Background of the trainer This course will teach you all the available techniques and how to practically apply them through the use of Excel and Argus/Estatemaster. An extensive use of case studies will be adopted to illustrate the principles covered. Ultimately delegates will get practical tips on layout and style in building and analysing user-friendly models which are available as additional benefits of the course. Who Should Attend This course is designed for delegates who are seeking to improve their technical real estate modelling skills in Excel. Bankers and financiers involved in real estate Directors and business development executives from corporates, equity sponsors and consultancies Day 1: Building Blocks of Real Estate Modelling 1. Using Excel for modelling Worksheet organization Data input, management and verification Use of colour/add-ins Naming of cells Location of input variables Review of Excel functions and their use Macros and their use Goal seeking Optimisation Circularity and how to resolve it Working with range names Graphs and charts What is needed from Excel and what is superfluous Principles of spreadsheets and workbooks Background of the trainer Case Study: Valuation and Cash Flow models 3. Fundamentals of Real Estate Models Objectives of real estate models Structure of real estate model design Dealing with escalation/inflation Monthly, quarterly and annual modelling Design, testing and feedback Model sensitivity and auditing Revenue and cost modelling Cash adequacy, recourse, standby and liquidity Financial coverage ratios and the bank perspective What are the software choices for real estate development? Estatemaster vs Argus vs Excel Demonstrations: Argus/Estatemaster Case Study: Evaluating good and bad Excel financial models 2. Equity valuation Equity NPV/ IRR and project IRR XNPV, XIRR, MIRR Modelling cash flow and ratios: Allowing for accountancy in real estate models: Depreciation Tax SPV accounting Capital allowances 4. Real Estate development modelling issues Architects, planners and real estate development Concept and objectives of Construct and Sell (CS) models Assumptions required for CS models Development cashflow corkscrews Sales prices and taxes Valuation and risk analysis of real estate development models Case Study: Examples of real estate development models To book this course or find out more, please click the Book button

20 Real Estate Modelling Continued... BOOK NOW 5. Real Estate investment modelling issues Limited recourse and loan terms and covenants in real estate lending Structuring and financing solutions Real estate investment finance experience worldwide Objectives of real estate investment models Buy and Let (BL) discounted cash flow modelling issues Risk analysis for real estate investment models Monte Carlo and real estate modelling Methods of handling risk What is Monte Carlo analysis? Worked examples of Monte Carlo analysis Applying Crystal Ball to CS and CL Models Analysing the results Presentation of Monte Carlo results to senior management Course Conclusion Case Study: Review of several real estate investment models and their decisionmaking input 6. Building a Construct and Sell (CS) Model Based on a real example, provided by an equity investor in a real estate transaction, delegates will review and test a model for the transaction. The exercise will include: Project Review Analysing the inputs Costing construction Dealing with input priorities Data plausibility Modelling loan drawdown Sales price projections and cap rates Establishing value from a construct and sale transaction Day 2: Building a Discounted Cash Flow Model (DCF) model Delegates will continue with the real example from Day 2 to construct a model based on the assumptions of construction, with revised assumptions, and leasing out. Revising construction inputs Loan assessment criteria PGI, EGI and NOI in the model Forecasting NOI and operating expenses Modelling loan amortization IRR NPV and other valuation analysis To book this course or find out more, please click the Book button

21 Location: London Joint Ventures Date: 10 Sep 2018 Standard Price: 695 +VAT Membership: VAT BOOK NOW Course Overview Joint ventures are an important option for businesses in their home country or internationally. Along with acquisitions it is a model for corporate growth. The course looks at the reasons for joint ventures including the commercial reasons and how they are reflected in the legal structure and documents. Looking at negotiations it focuses on the general aspect of negotiations as well as critical areas for joint venture negotiations. The course recognises the commercial and legal problems that regularly arise during the life cycle of a joint venture. It covers the often thorny issue of pre contract documents including the differences in common and civil law. It goes on to look at the different options of legal structures that can be selected depending on the commercial objectives and addresses the advantages and disadvantages of each option including limited companies, partnerships and contractual joint ventures. It then looks at challenges of decision making in a joint venture where parties are working to a common end but have different ultimate interests. This leads to differences, ways to resolve them are looked at and what happens if the joint venture partners are unable to reach a decision, including deadlock and options such as Russian Roulette and Texas Shoot Out. How and to whom parties may transfer shares, minority shareholders. Coming to the end of the life cycle the programme focuses on exit, termination and change of control. During the course participants will look at case studies, look at sample documents and receive checklists to assist them with dealing with joint ventures a following the course. Introduction What is a Joint Venture? Why enter into a Joint Venture? Reasons for Joint Ventures Choosing a legal structure Key legal considerations Information you need to decide on the legal structure Key success factors Negotiating General Guidelines Objectives in negotiations Strategy BATNA Zone of Possible Agreement Price versus value Creating and sustaining value 10 areas where joint venture negotiations can establish successful sustainable joint ventures Pre Contract Documents Heads of Terms/ MoU with Sample Document Pros and cons Types of pre-contract documents Duty of good faith Letters of intent Memorandum of Understanding Subject to contract Governing law choice and impact Advice to negotiators Checklist To book this course or find out more, please click the Book button

22 Joint Ventures Continued... BOOK NOW Selecting the Legal Structure that Reflects Commercial Objectives Key Determinants Relevant laws International joint ventures Questions to address Restrictions Main Joint Venture Structures Advantages & Disadvantages Limited Liability Company Limited Liability Partnership Partnership Contractual Joint Venture Contentious areas Decision Making Directors Votes Quorum Reserved Matters Conflicts of Interest Deadlock & Default Default Casting Vote Winding up Put and Call Options Sale Texas Shoot Out Dutch Auction Russian Roulette What Redcliffe s clients are saying about the course; Really good overview of all aspects of Joint Ventures arrangements Opportunity to listen to experiences of others on the course. Good course materials that will serve as a useful checklist I enjoyed the interactive nature with a relaxed and calm presentation. Topics were broad and covered most aspects of Joint Ventures Interactive, good case studies and examples. The trainer made the subject very interesting Real life examples were useful & engaging. Good mix of activities, workshops, presentation. Transfer of Shares Pre emption rights Right of first offer Right of first refusal Pre emption problem areas Permitted transfers Change of control Drag and Tag Rights Exit, Termination and Change Importance and Key Issues Fixed term/joint renewal Termination for convenience Termination for Cause Consequences of Exit/Termination Winding up Case studies Sample documents and checklists To book this course or find out more, please click the Book button

23 UK Commercial Property Understanding the Tax Issues Advanced Negotiation Issues in M&A Date: 21 May 2018, 03 Oct 2018 Date: Location: Location: London London Standard Price: Price: VAT Membership Price: Membership: VAT... BOOK NOW Course Overview UK property taxes have become increasingly complex in recent years. There are a number of high risk compliance areas and anti-avoidance provisions that can catch out the unwary and prove very costly in terms of unforeseen tax liabilities and penalties. At the end of the session, participants should be aware of the major tax issues, both compliance and planning, that are likely to arise on construction projects and property purchases or sales. Throughout, emphasis will be given to key cases and the tax traps that you should try to avoid. Overview Definition of commercial land and buildings Which taxes apply Distinction between property investment and property dealing Comparison with the rules for residential property How different ownership methods (e.g. direct/company/trust) impact on the tax charges Expenditure on buildings Capital/revenue distinction, including repairs/renewals relevant case law Allowances for integral plant in buildings The FA 2012 rules on transferring buildings Course containing Content fixtures Compliance issues S.198 elections Apportionment issues Lease premiums Tax impact for the tenant Tax impact for the landlord Rent-free periods and reverse premiums Payments under lease dilapidation provisions Mixed use properties apportionment of consideration Importance of the Oates case at the Upper Tribunal in 2014 Practical example of a shop re-fit Calculating taxable rental income The different rules for individuals and companies Tax relief for finance costs How losses can be relieved Capital Gains tax (CGT) Allowable costs Calculating gains and losses On assignment of Freeholds / Long leases Short leases (i.e. < 50 years) On granting Long leases Short leases On transfers to connected persons Tax rates Tax reliefs available FA 2016 anti-avoidance on property deriving its value from UK land and buildings Incorporation of Property rental businesses Trading businesses with significant value in property (e.g. care homes) Compliance issues Planned extension of CGT to non-resident owners of UK commercial land and buildings Inheritance Tax Overview and rates Business property relief (BPR) and Agricultural property relief (APR) Main conditions Why rental businesses do not qualify Anti-avoidance where relevant property funded by debt Stamp duty land tax (SDLT) Rates The different regimes in Scotland and Wales Key compliance issues Anti-avoidance The principal reliefs Group relief Charity relief Sale and leaseback relief Value Added Tax (VAT) The different rates that can apply to commercial property transactions Option to tax land or commercial buildings Why it is done To book this course or find out more, please click the Book button

24 UK Commercial Property Advanced Understanding Negotiation Issues the Tax in M&A Issues Location: London Continued... Date: Standard Price:...+VAT Membership:... BOOK NOW BOOK NOW Course Overview Compliance procedures Common problems and errors Key cases Extracting commercial property from a company Distributions in specie Pension contributions in specie Demergers To book this course or find out more, please click the Book button

25 Islamic Finance Real Estate: The Halal Way In-House or via Live Webinar Course Overview This one day course will be of enormous value to real estate practitioners who are doing business with the Muslim world or those who want to break-into the Shari ah-compliant real estate market. Real estate, especially UK real estate, continues to hold a fascination for many Islamic banks and institutions and high net worth investors. We take attendees through all aspects of the Shari ah-compliant market with particular focus on what is permissible and what is not. We also look at commonly employed structuring techniques as well as typical problematic matters that arise in practice and their solutions. Our objective is to equip attendees with the knowledge they need to know to engage with Islamic real estate practitioners with confidence. Session 1 Everybody loves real estate state of the market retail sector commercial sector what type of property is of interest to Islamic financiers? What conventional activities are permissible? sale & purchase leasing mortgaging & foreclosing Can real estate be financed? characterising finance characterising real estate prohibited assets and activities prohibited types of money Session 2 Riba is not allowed, but: what is riba? what alternatives are there to riba? bai, ijara, shirkah What is the opinion on: rahn (pledge) kafalah (guarantee) What about co-investment? the de minimis rules segregation cleansing typical co-investment structure What about hotels? Session 3 The evolution of UK retail financing techniques Murabaha (re-sale with mark-up) pros and cons Ijara (lease) pros and cons Diminishing musharaka (gradual ownership) pros and cons Issues that arise, include: pricing insurance agency Tawarruq (aka commodity murabaha ) is it the easy way to finance everything? is it morally reprehensible? Session 4 Documenting the deal the lawyer s preparation legal issues to look out for getting Shari ah approval ensuring Shari ah compliance Case study financing of a leasehold interest in West London Question & Answer session CASE STUDY holiday resort development in the Arab Gulf

26 Real Estate Investment Strategy In-House or via Live Webinar Course Overview Real Estate is a major investment Asset Class offering a huge range of financing opportunities. Risks Real Estate values are very sensitive to the underlying economic fundamentals, political events as well as the financial markets and interest rates. Market conditions There is a huge amount of change both in terms of the underlying macroeconomic and political environment, environmental considerations and radical changes in how people work and shop, all of which make it essential to consider the role of Real Estate in an investment portfolio and the composition of the portfolio. Real Estate Fund Focus Traditionally large scale Real Estate Investment Funds run by Pension Funds and Insurance Companies have tended to be passively managed and focused on Direct Investments in core sectors such as offices and retail. Will that approach still be optimal when there is a huge change in the type of demand for Real Estate and when there has been a substantial increase in new types of large scale investors? Objectives of the training This course will provide a forum for discussion of performance of various Real Estate sectors since the credit crisis, with a primary focus on Commercial Real Estate in some of the major Developed Economies, as well as the outlook for the Real Estate sector. There will be some coverage of Housing Finance opportunities. In meeting those objectives participants will be requested to make a recommendation for the structure of a Real Estate portfolio. Course methodology This programme will be case study driven, with exercises based on: Relative performance of selected Real Estate sectors since the onset of the credit crisis Participants views on the outlook for specified Real Estate sectors over the next 5 7 years Who should attend? This programme will be relevant to people working for organisations involved in Real Estate investment decisions including: Insurance Companies Pension Funds Sovereign Wealth Funds Real Estate Investment Funds Family Offices investing in Real Estate REIT and Real Estate Companies Participant pre requisites Participants should already be familiar with the core principles of investment appraisal and company valuation techniques, as well as the core functions in Excel and the principal types of Real Estate investments. Previous familiarity with the financing of / investment in Commercial Real Estate has been assumed. Participants should bring a laptop to the course. Overview of developments in the Real Estate markets post the credit crisis Exercise: participants rank various types of real estate investments based on their relative performance since the onset of the credit crisis, as well as in relation to other major asset classes Review of exercise and discussion: Macroeconomic cycles what can be learned from the credit crisis? Real Estate vs other major asset classes Bank debt markets CMBS Housing Finance Country specific performance Equity investments Sector performance Risks and opportunities in Commercial Real Estate Investments Exercise: Participants identify and discuss the principal risks that they believe will influence returns from Real Estate Investments in the next 5 year period Constructing a Real Estate Investment Portfolio Participants are assigned to groups and make their recommendations on a Global Real Estate portfolio fund taking into account Country and sector allocation Liquidity Risk and expected return Size of investments Expected investors Fees

27 IFRS Accounting for Real Estate In-House or via Live Webinar Course Overview After a long period of stability, the IFRS regime for real estate assets and transactions is entering a period of rapid change and elevated uncertainty, with the imminent introduction of three major new financial reporting standards. IFRS 16 Leases, effective from 1st January 2019, substantially and controversially redraws the boundaries between operating and finance leases: IFRS 9 Financial Instruments, effective from 1st January 2018, brings all lease receivables into the scope of compulsory impairment provisioning based on expected credit losses; and IFRS 15 Revenue from Contracts with Customers, also effective from 1st January 2018, whilst retaining the basic IFRS principles for revenue recognition, calls for much more attention to be paid to the unbundling of the separate components in longer-term contracts. At the same time, continued dissatisfaction with IFRS-based numbers, specifically as a basis for cross-border intercompany comparisons, underlines the importance of the industry-specific non-gaap performance measures developed by EPRA. This course has four principal objectives. It is intended: to give preparers and users alike a comprehensive and tailored overview of the forthcoming changes to the IFRS regime as it impacts entities exposed to the real estate sector, as investors, owner-occupiers, lessors or lessees to give preparers of accounts a firm basis for planning the practical implementation of the IFRS and EPRA reporting regimes to enable senior managers of entities exposed to the real estate sector (in whatever capacity) to modify their decision-making processes to take account of the new accounting environment, especially in those areas where the standards permit or require the exercise of significant judgement to equip investors and analysts with the necessary new knowledge and skills to make informed judgements about the financial performance, condition and prospects of entities exposed to the real estate sector The course is essentially forward-looking and is accordingly based on IFRS accounting standards as published, regardless of their EU-endorsement status or their effective dates for mandatory adoption. At every stage, the course will pinpoint the areas of continuing uncertainty and difficulty in the new standards, whether in their interpretation, application or implementation by preparers, or in their analysis by external users. The course makes extensive use of real-life comparative case studies and of fully worked examples. Owned property: refresher on the (largely unchanged) accounting requirements: IAS 16, IAS 23 and IAS 40 Choosing between cost model and fair value model Cost model: how to determine Initial cost including borrowing costs and appropriate depreciation schedule Identification and allocation of cost to separable elements Identifying relevant indicators for impairment review Estimating recoverable amount: Value in use versus Fair value less costs to sell Fair value model: Estimating fair values (a) of unique assets and (b) in illiquid markets Setting valuation assumptions Trading and development properties The shifting boundary between ownership and leasing IAS 17 and IFRS 16 Overview of the key differences between IAS 17 and IFRS 16 Right-of-use asset defined Identifying a lease Allocating consideration to lease and non-lease (service) components of a contract Interaction between IFRS 16 and IFRS 15 Measuring a lease Leases with variable payments Lease modifications and options (extensions, terminations) Subleases Sale and leaseback transactions Available options and how/when to use them Detailed examination (from perspective of all parties) of typical transactions whose classification will change after transition to IFRS 16 Financial impacts Impact of IFRS 15 and 16 on published financial statements Impact of the IFRS 9 expected loss impairment regime for all lease receivables Impact on bank covenants and on modification of financings Other continuing issues (examples only) Rent-free periods and other incentives Tenants improvements Step-up rents Disclosures, especially regarding management judgements, impairment and revaluations EPRA performance measures, and the EPRAto-IFRS reconciliation

28 Real Estate Finance for Commercial Lenders Investment Lending In-House or via Live Webinar Course Overview This course is a thorough review of the key factors which need to be considered by lenders when funding residential and commercial investments. It considers the key issues using a variety of relevant examples and case studies to bring the session to life and ensure it is firmly rooted in real World issues. It covers a variety of technical considerations designed to boost the knowledge of existing practitioners and sets out the key cashflow and capital value risks. It also sets out the appropriate mitigants lenders need to consider. It is appropriate for anyone working with SME and midcorporate residential or commercial investment customers/risk. Learning Objectives: Participants will explore the key issues facing investors and how they impact on the lender. They will consider the technical issues which can impact investment performance and value - with specific reference to key commercial investment issues and terms. The programme will also consider the role of due diligence and specifically the drivers of commercial investment valuation methodologies Delegates will also learn about the key areas of risk for the Bank and consider how they can be mitigated by effective lending policies and practices. Course Methodology: Classroom style delivery with maximum use made of relevant mid-market UK based case studies and exercises. Highly interactive programme with delegate participation and questioning strongly encouraged and featuring throughout. The classroom session will also be boosted by a short amount of pre-course reading to provide background information and ensure all delegates have a consistent minimum level of awareness and knowledge prior to the session. Target Audience: This course is aimed at real estate finance lenders working with UK SME and mid-market real estate customers. The course is suitable for both Credit and relationship management staff. Some existing knowledge of the sector is desirable but not necessary, as the pre-course reading element will ensure a minimum common platform of core knowledge. The course will initially consider a series of introductory issues which are relevant to the investor and so impact Bank support for investment deals: Why do people invest in property: Alternative investment classes and options. How does property stack up relative to the other options? Classes of investors Corporates, professional investors and amateur / buy to let landlords Why is gearing so important to investor returns? What factors need to be considered: Tenure Lease terms (including term, breaks, rent reviews, insurance, Tenant Act, forfeiture, sub-letting and alteration) Costs: ӹgross ӹ to Net income ӹcapital ӹ expenditure ӹvoid ӹ holding costs ӹpurchaser ӹ costs including Stamp Duty Land Tax What makes a good investment Asset (by asset class): Offices: ӹlocation ӹ and physical prominence ӹfloorplate ӹ and specification ӹtransport ӹ and occupier demand ӹflexibility ӹ Industrial: ӹtransport, ӹ local access and location ӹyard ӹ and building specifications ӹsecurity ӹ

29 Real Estate Finance for Commercial Lenders Investment Lending Continued... ӹlocal ӹ labour and population pool High Street and Shopping Centre Retail: ӹfoot ӹ flow and prime location ӹanchor ӹ tenants ӹfrontage ӹ and building shape ӹimportance ӹ of leisure and food and beverage offering Retail Warehouses and Out of Town Retail: ӹtransport, ӹ parking and congestion management ӹflexible ӹ units with appropriate planning use consents ӹcatchment ӹ area and competition ӹscale ӹ Residential: ӹaddress ӹ prominence and kerb appeal ӹdiffering ӹ needs of different occupier groups transport links, retail and leisure access or local schools ӹparking ӹ and services provided ӹwhat ӹ other factors do investors need to consider: Growth prospects impact of economic performance and market trends (e.g. trend to greater on-line retailing or rise in young professionals renting) Capex spend and EPCs Opportunities to add value Occupier demand characteristics Investor demand characteristics Property Returns: Income and cashflow: ӹincome ӹ and costs ӹdemand ӹ ӹvoids ӹ ӹsustainability ӹ ӹcapex/maintenance ӹ requirements ӹlease ӹ terms Capital growth: ӹnet ӹ income ӹinvestor ӹ demand Valuation Methodologies we will then examine the importance of valuations to investment assets and the key approaches valuers use. We will consider how they can impact on investment performance and Bank risk RICS Valuation Standards the Red Book Definition of market value and market rent Measurement rules Special Assumptions Valuation approaches and the level of due diligence undertaken Valuation Methods: Direct Capital Comparison: ӹrelevance ӹ ӹselection ӹ Investment Method: ӹall ӹ risk yield ӹfactors ӹ to be considered Discounted Cashflow method: ӹprinciple ӹ of time value of money ӹwhen ӹ used and the selection of a discount factor Residual Appraisal: ӹwhen ӹ used to value development opportunities ӹmethodology ӹ and selection of developer profit Vacant Possession values: ӹwhen ӹ they are used ӹwhat ӹ assumptions need to be made Impact of specific events on valuations: Valuation of a rack rented property Impact of over-renting (eg due to the impact of an RPI leases) Approaching lease breaks and short leases Tenant defaults Exercises: This session is facilitated using a series of short exercises and discussions to draw out the key issues. Working in small teams and presenting and discussing issues features throughout The Lending Banker s Perspective - we will explore the key Bank response and strategy to both residential and commercial investment lending, using a three step approach: The Customer: Strategy and Skills: What is their motivation and are they committed full time? What experience do they have? How relevant is it location, asset class. Have they had through the cycle experience? What is the range of skills for larger teams are they complimentary? Is there any previous experience on the same scale and level of complexity? What if any professional qualifications/ experience do they have What professional support do they have available? How strong are their rent collection and asset management skills especially for large resi investment portfolios? Cashflow: How strong is their cashflow can they cover any voids, undertake any capex which may be required?

30 Real Estate Finance for Commercial Lenders Investment Lending Continued... Whose cash is it the management or external/3rd party investors and why does this make a difference What other assets do they have available if there were to be a problem could they inject more cash. Are assets easily liquidated to create cash if needed? Are there any living expenses/management charges to be deducted from the cashflow? The Asset: Cashflow and Rental Issues: Location and suitability for target market Demand in local market and forecast changes to demand and demographics Lease terms and Re-let risks for commercial investment assets: ӹlease ӹ length ӹwault ӹ ӹtenant ӹ strength ӹlease ӹ breaks ӹrent ӹ Reviews ӹlease ӹ Terms Costs for both residential and commercial assets why the real costs should be ascertained wherever possible The Structure: Borrower Issues: Who is the borrower is it a sole trader, partnership, Corporate entity or simple SPV and what are the implications for the Bank? Is a guarantee appropriate? Structure of Bank Support: Should we lend against capital values or cashflows? Differences between residential and commercial investment loans Suitable support levels and the key considerations Due Diligence: Valuation due diligence Legal due diligence including the report on title Capital Values Impact of yield movements Impact of cashflow changes Documentation and Security: Key clauses included within bank facility agreements and mortgage documentation The key investment covenants and difficulty in setting a traditional net rent covenant in a low interest rate environment Mortgages, debentures and guarantees Actions available (and sensible) on default or breach Structure and Repayment: Tenor Cashflow and structuring assumptions use of an appropriate Excel model to monitor cash Interest rate protection fixed rate or hedge What constitutes a viable Plan B? Case Study: This course is closed using two real-life case studies. One is a residential investment scheme and the other a multi-let commercial investment scheme. Delegates are invited to consider the key risks and their response to them. They are asked to consider the appropriate basis of Bank support and the structure which should be used to manage and control the Bank s risk. They should provide a clear recommendation and basis of support

31 Real Estate Finance for Commercial Lenders Residential Development In-House or via Live Webinar Course Overview This course is a thorough review of the key factors which need to be considered by lenders when funding residential development. It covers all phases from initial design and grant of planning permission, through pre-drawdown controls and due diligence, the construction and monitoring phase, through to practical completion and sale. It covers a variety of technical considerations designed to boost the knowledge of existing practitioners and sets out the key risks and appropriate mitigants lenders need to consider. It is appropriate for anyone working with SME and mid-corporate residential development customers/risk Learning Objectives: Participants will explore the key issues facing residential developers and how they impact on the lender. They will consider the technical issues which can arise during the construction phase, and the due diligence the Bank would undertake to help mitigate them Delegates will also learn about the key areas of risk for the Bank: - construction risk, sales risk, customer risk, cashflow risk and documentation risk and explore how they can all be mitigated by effective lending policies and procedures. Course Methodology: Classroom style delivery with maximum use made of relevant mid-market UK based case studies and exercises. Highly interactive programme with delegate participation and questioning strongly encouraged and featuring throughout. The classroom session will also be boosted by a short amount of pre-course reading to provide background information and ensure all delegates have a consistent minimum level of awareness and knowledge prior to the session. Target Audience: This course is aimed at real estate finance lenders working with UK SME and mid-market real estate customers. The course is suitable for both Credit and relationship management staff. Some existing knowledge of the sector is desirable but not necessary, as the pre-course reading element will ensure a minimum common platform of core knowledge. The pre-construction Phase Planning and design The difference between outline and full planning permission Planning conditions and reserved matters Bats, newts and Romans Judicial review process S106 and the Community Infrastructure Levy Site issues: Flood risk Environmental Contamination Rights of Light Party Walls Access issues and ransom strips Procurement and Construction: The development appraisal Costings and contingencies why fixed cost contracts are desirable but hard to really achieve Procurement methodology self-build or third party construction management (including project manager, traditional build, or design and build) Construction tendering and contractor selection The Construction and Monitoring Phase Time and cost overruns How they typically arise Borrower or contractor responsibility: ӹӹchanges in specification ӹӹweather delays ӹӹsite problems Build cashflows Contractor failure Liquidated damages clauses Practical completion The Sales Phase Pre-sales or sales off-plan Identification of the end buyer/market in the early design phases Effective marketing strategies

32 Real Estate Finance for Commercial Lenders Residential Development Continued... What happens if sales are delayed? What contingency options are normally appropriate? Case Study: The above sessions will be facilitated using a real-life UK case study. It will take the delegates through each of the key stages of a scheme and allow them to explore the issues in each phase and consider the impact on the borrower (and the Bank). It will consider what options and remedies may be available in each circumstance and discuss the customer options and the Bank s stance. The Lending Banker s Perspective: Drawing on the first case study exercise we will explore the key Bank approach to residential development lending, using a three step approach: The Customer: Strategy and Skills: What is their motivation and are they committed full time? What experience do they have? How relevant is it location, asset class. Have they had through the cycle experience? What is the range of skills for larger teams are they complimentary? Is any previous experience on the same scale and level of complexity? What if any professional qualifications/ experience do they have What professional support do they have available? Cashflow: How strong is their cashflow is all cash invested up-front ahead of the Bank? Whose cash is it the management or external/3rd party investors and why does this make a difference What assets do they have available if there were to be a problem could they inject more cash. Are assets easily liquidated to create cash if needed Is some of their contribution really just quasi contribution eg from a planning gain uplift in land values? Are there any living expenses/project charges to be deducted from the cashflow? The Asset: Demand and Sales Issues: Location and suitability for target market Size of units and liquidity / demand in local market Scale of development and absorbability Marketing Construction Issues: Summary of Bank responses to the risks identified in the first session, specifically: The role of the Independent Monitoring Surveyor (IMS) The initial IMS report Drawdown monitoring and WIP valuation issues The role of the RM site visit Managing cost overruns The Structure: Borrower Issues: Who is the borrower is it a sole trader, partnership, Corporate entity or simple SPV and what are the implications for the Bank? Is a guarantee (either for cost overruns or to tie in the management) appropriate? Due Diligence: Valuation due diligence including residual land valuation methodologies and use of relevant comparables Legal due diligence including the report on title Monthly IMS reporting Documentation: Key clauses included within bank facility agreements and mortgage documentation The key development covenants Actions available (and sensible) on default or breach Security: Legal mortgages (and/or debenture) Use and purpose of collateral warranties Structure and Repayment: Tenor Cashflow and monitoring controls Land loans and why they are much more risky Overdrafts and why they should not feature Handling time extensions Formulating a Plan B What happens if things go wrong What should the Bank response be? What sensitivities are appropriate What is the normal contingency option for the Bank Exercises: This session is facilitated using a series of short exercises and discussions to draw out the key issues and identify why they impose a risk on the Bank and what can be done to help mitigate them Case Study: This course is closed using a reallife case study of a residential development deal of the type regularly seen by UK banks. Delegates are invited to consider the key risks and their response to them. They are asked to consider the appropriate basis of Bank support and the structure which should be used to manage and control the Bank s risk. They should provide a clear recommendation and basis of support

33 Housing Finance In-House or via Live Webinar Course Overview Background Opportunities Housing is a fundamental need and the size of Housing Finance markets is huge with a range of financing instruments, both debt and equity related. There are a variety of ways where providers of finance can gain exposure to Housing related financing opportunities. Risks Real Estate values, including house prices, are very sensitive to the underlying economic fundamentals, political events as well as the financial markets and interest rates. Following the onset of the credit crisis there has been substantial downturns in housing prices in some geographic markets and substantial price increases in other markets, emphasising that the traditional maxim of as safe as houses is not always the case. By contrast however to some other sectors, such as Commercial Real Estate, Housing Finance can provide greater risk protection via diversification and also because transactions are, dependent on the financing structure, supported not just by the ongoing value of the underlying housing but also by rents and / or mortgage payments from Borrowers. Market conditions As a result of the impact of the subprime crisis, economic conditions and demographic shifts there are widespread concerns about issues such as housing booms and Affordable Housing. As a result there is a continuing need to find solutions to the financing of housing. Given relatively low economic growth rates in many Developed Economies Housing Finance potentially provides an opportunity for providers of capital to gain exposure to a sector that provides a range of risk and return profiles. Objectives of the training This course will provide a forum for discussion of the various financing opportunities in the Housing Finance area and some of the features of, and structuring issues related to, various instruments that provide opportunities to gain exposure to the Housing Markets. Course methodology Using a mixture of presentations and mini case study examples this programme will focus on the following aspects of Housing Finance Market background and some lessons from the subprime mortgage crisis Different segments of the Housing markets Credit risks associated with various Housing Finance options Key features of selected financing instruments For participants seeking to build their knowledge of the financial modelling of Housing Finance we suggest attendance on other programmes that concentrate on financial modelling. Who should attend? This programme will be relevant to people working for organisations involved in the analysis and structuring of large scale Housing Finance transactions such as Banks, Institutional Investors, Sovereign Wealth Funds, Government Agencies, Social Housing organisations, Private Debt Funds, Real Estate Investors, housebuilders and advisers including: Credit and Investment Analysts Debt and Equity Capital Markets origination and syndication Treasury Risk Managers in financial institutions Credit Portfolio Managers Corporate Finance personnel Corporate Treasury Legal advisers seeking to enhance their understanding of finance related topics Participant pre requisites Limited practical experience of Housing Finance transactions will be assumed. Participants should however already be familiar with the core principles of credit risk analysis and the fundamental features of debt and equity financing instruments.

34 Housing Finance Continued... Session 1 Overview of the Housing Finance markets Trends in the housing markets and implications for financing needs and risks overview of selected IMF and OECD statistics Providers of residential mortgage finance and different models for Housing Finance Government Agencies Private Sector Banks Capital markets including securitisation Social Housing organisations Development Finance Institutions Discussion: The credit crisis in 2008 and the role of US Government Sponsored Entities what were the contributing factors and what has been the response? Session 2 Housing Finance and credit risk as safe as houses? Default statistics Distressed debt and overview of some approaches by governments to deal with problem mortgage portfolios Review of elements of the history of Northern Rock and UK Asset Resolution to illustrate the performance of the underlying residential mortgage portfolios and also some trends in the valuation of some traded debt instruments Key elements in the credit rating of selected types of Housing Finance transactions Residential Mortgage Backed Securities, including risks related to both the underlying pool of assets and specific tranches Covered Bonds analysis of the mortgage pool and issuing institution Housing Associations, and how they have been funded Housebuilders, and exposure to real estate cycles Case study: Rating a Housing Association debt issue Session 3 Risks and opportunities in Housing Finance - debt An overview of some key characteristics of selected types of Housing Finance transaction, such as RMBS and tranching of the debt structure Covered Bonds Financings supported by Rented Housing, both private rented sector and through social housing providers Use of Public Private Partnerships, including potential support from Governments and Development Finance Institutions Student accommodation Exercise: Structuring a transaction supported by rental properties Session 4 Creating a Housing Finance Fund Equity and debt funded Participants make a recommendation on a Leveraged Housing Finance Fund taking into account Capital structure both debt and equity Expected investor profile Target returns from an equity perspective Structure of the portfolio Credit pricing Fees Conclusion of the programme

35 Real Estate Investment and Management - South Africa In-House or via Live Webinar Course Overview The course has four primary aims: To create detailed knowledge of the issues, problems and opportunities for the property industry To develop a greater understanding of the role of property within the overall development and investment strategy of an organisation To appreciate the investment strategy into real estate required for a pension fund, especially in the South African context To enhance the management and organisational skills necessary for effective property management Day 1 Real Estate as an Investment Real Estate Background: Real estate investment and management within the larger global economy Types of property and their performance Case Study: The emergence of land and property as a crucial investment class Valuation theory and Applications Examples of Land and Property Valuations Property taxation, valuation and legal framework Real estate in South Africa private ownership, recent development, stock markets and family investments Key stakeholders within the property industry Property professionals and their role Case Studies: The Royal Institute of Chartered Surveyors and the Urban Land Institute Financing Property Purchase Bank loans for property investment Secondary loans Case Study: Debt formulation and deal structuring in real estate investment Equity investment Calculation of returns Examples of Excel financial models for real estate investment analysis different classes of investment ARGUS DCF Valuation software demonstration Property and Conveyancing Law Legal principles, structure, court and devolution Legal issues for property professionals Examples of legal issues for property investment Law of contract Law of Tort, nuisance and negligence Land law, property rights and obligations Applied property law, legal issues in building and construction, planning and development, liabilities for owners / occupiers Islamic property legal issues Mortgage Law Case Study: the South African mortgage market Differences in real estate law between South Africa and other jurisdictions Case Studies of real estate law and legal decisions Day 2: Property as an asset class All About Leases Nature and creation of leases Differences between types of commercial property leases Commercial leases and statutory control Residential tenancies and statutory control Structure of leases e.g. length of the lease period; including options for tenant alter-

36 Real Estate Investment and Management - South Africa Continued... ations and expansion Lease Calculations (with worked examples and exercises) Rent reviews and lease renewal options Covenants to leases e.g. repairing liability, occupancy conditions, sub-leases, termination, service charge provision Tenant Management Qualifying the prospective tenant financially Case Studies: Do Ratings Work? Marketing considerations for office buildings understanding the market, building a marketing plan, measuring marketing efficiency Group work: preparing a marketing plan for a commercial building in Johannesburg Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan Security deposits and other negotiation issues Inspections Effectively handling inquiries and complaints What to incorporate in tenant and director s meetings Group work: Handling tenant negotiations Housing and tenant management Bricks and Mortar Property Management Advanced Operations And Facilities Management Occupational Health And Safety Maintenance and Structural Preservation Procurement and Supply Chain Management Property Life Cycle Planning Sustainability and Real Estate Management Information Technology Staffing Management Contracts and Outsourcing Business Management Strategic business planning processes Business life cycle Analysing industry trends Examples of real estate investment and occupancy strategies for pension funds and companies Accounting and monetary practices Insurance Financial Management Principles Reporting procedures in the management of different kinds of properties Preparing profit-and-loss statements Tax implications; tax records; Cash flows; depreciation; investment tax credits; after-tax cash flow; Risk management and how to obtain proper insurance Accounting theory and methods Asset and liability valuations Budgeting and cash flow analysis Case Studies; principles of real estate management budgets Decision making based on cost data; industrial, commercial and property finance; ratio analysis Property accounting principles for investors (including IAS) Presentation to clients and management of client s accounts Case Study: financial management - outlining a property s sources of income and types of expenses and how they are accounted and reported Real Estate Strategy Principles of property management within the built environment and a business environment Private and public strategy for the management of property resources within an operational plan Case Study: Government real estate planning, institutions and strategies Application of legal and planning restrictions on asset enhancement Corporate property strategy Case Studies: Sale and Leaseback Ownership Forms and Goals Ways investors can own real estate and their

37 Real Estate Investment and Management - South Africa Continued... expectations for this type of investment The role of real estate funds Operational Property Portfolio Planning Master, action and project planning Change management and relocations Selling property Group work: preparing a sales marketing plan for a commercial property Portfolio Analysis Comparison of risk return profiles of real estate and financial investment assets Measuring investment performance Principles of portfolio diversification The case for active portfolio management Application of property within a larger non-property investment market The nature of risk and return from property compared with bonds and equities Case Studies: portfolio management and property investment how much property should a fund hold? Course Conclusion

38 Real Estate Investment and Management - Hong Kong In-House or via Live Webinar Course Overview The course has four primary aims: To create detailed knowledge of the issues, problems and opportunities for the property industry To develop a greater understanding of the role of property within the overall development and investment strategy of an organisation To appreciate the investment strategy into real estate required for a pension fund, especially in the South African context To enhance the management and organisational skills necessary for effective property management Day 1 Real Estate as an Investment Real Estate Background: Real estate investment and management within the larger global economy Types of property and their performance Case Study: The emergence of land and property as a crucial investment class Valuation theory and Applications Examples of Land and Property Valuations Property taxation, valuation and legal framework Real estate in Hong Kong private ownership, recent development, stock markets and family investments Key stakeholders within the property industry Property professionals and their role Case Studies: The Royal Institute of Chartered Surveyors and the Urban Land Institute Financing Property Purchase Bank loans for property investment Secondary loans Case Study: Debt formulation and deal structuring in real estate investment Equity investment Calculation of returns Examples of Excel financial models for real estate investment analysis different classes of investment ARGUS DCF Valuation software demonstration Property and Conveyancing Law Legal principles, structure, court and devolution Legal issues for property professionals Examples of legal issues for property investment Law of contract Law of Tort, nuisance and negligence Land law, property rights and obligations Applied property law, legal issues in building and construction, planning and development, liabilities for owners / occupiers Islamic property legal issues Mortgage Law Case Study: the Hong Kong mortgage market Differences in real estate law between Hong Kong and other jurisdictions Case Studies of real estate law and legal decisions Day 2: Property as an asset class All About Leases Nature and creation of leases Differences between types of commercial property leases Commercial leases and statutory control Residential tenancies and statutory control Structure of leases e.g. length of the lease period; including options for tenant alter

39 Real Estate Investment and Management - Hong Kong Continued... ations and expansion Lease Calculations (with worked examples and exercises) Rent reviews and lease renewal options Covenants to leases e.g. repairing liability, occupancy conditions, sub-leases, termination, service charge provision Tenant Management Qualifying the prospective tenant financially Case Studies: Do Ratings Work? Marketing considerations for office buildings understanding the market, building a marketing plan, measuring marketing efficiency Group work: preparing a marketing plan for a commercial building in Hong Kong Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan Security deposits and other negotiation issues Inspections Effectively handling inquiries and complaints What to incorporate in tenant and director s meetings Group work: Handling tenant negotiations Housing and tenant management Bricks and Mortar Property Management Advanced Operations And Facilities Management Occupational Health And Safety Maintenance and Structural Preservation Procurement and Supply Chain Management Property Life Cycle Planning Sustainability and Real Estate Management Information Technology Staffing Management Contracts and Outsourcing Business Management Strategic business planning processes Business life cycle Analysing industry trends Examples of real estate investment and occupancy strategies for pension funds and companies Accounting and monetary practices Insurance Financial Management Principles Reporting procedures in the management of different kinds of properties Preparing profit-and-loss statements Tax implications; tax records; Cash flows; depreciation; investment tax credits; after-tax cash flow; Risk management and how to obtain proper insurance Accounting theory and methods Asset and liability valuations Budgeting and cash flow analysis Case Studies; principles of real estate management budgets Decision making based on cost data; industrial, commercial and property finance; ratio analysis Property accounting principles for investors (including IAS) Presentation to clients and management of client s accounts Case Study: financial management - outlining a property s sources of income and types of expenses and how they are accounted and reported Real Estate Strategy Principles of property management within the built environment and a business environment Private and public strategy for the management of property resources within an operational plan Case Study: Government real estate planning, institutions and strategies Application of legal and planning restrictions on asset enhancement Corporate property strategy Case Studies: Sale and Leaseback Ownership Forms and Goals Ways investors can own real estate and their

40 Real Estate Investment and Management - Hong Kong Continued... expectations for this type of investment The role of real estate funds Operational Property Portfolio Planning Master, action and project planning Change management and relocations Selling property Group work: preparing a sales marketing plan for a commercial property Portfolio Analysis Comparison of risk return profiles of real estate and financial investment assets Measuring investment performance Principles of portfolio diversification The case for active portfolio management Application of property within a larger non-property investment market The nature of risk and return from property compared with bonds and equities Case Studies: portfolio management and property investment how much property should a fund hold? Course Conclusion

41 Real Estate Investment and Management - UAE In-House or via Live Webinar Course Overview The course has four primary aims: To create detailed knowledge of the issues, problems and opportunities for the property industry To develop a greater understanding of the role of property within the overall development and investment strategy of an organisation To appreciate the investment strategy into real estate required for a pension fund, especially in the UAE s context To enhance the management and organisational skills necessary for effective property management Day 1 Real Estate as an Investment Real Estate Background: Real estate investment and management within the larger global economy Types of property and their performance Case Study: The emergence of land and property as a crucial investment class Valuation theory and Applications Examples of Land and Property Valuations Property taxation, valuation and legal framework Real estate in UAE private ownership, recent development, stock markets and family investments Key stakeholders within the property industry Property professionals and their role Case Studies: The Royal Institute of Chartered Surveyors and the Urban Land Institute Financing Property Purchase Bank loans for property investment Secondary loans Case Study: Debt formulation and deal structuring in real estate investment Equity investment Calculation of returns Examples of Excel financial models for real estate investment analysis different classes of investment ARGUS DCF Valuation software demonstration Property and Conveyancing Law Legal principles, structure, court and devolution Legal issues for property professionals Examples of legal issues for property investment Law of contract Law of Tort, nuisance and negligence Land law, property rights and obligations Applied property law, legal issues in building and construction, planning and development, liabilities for owners / occupiers Islamic property legal issues Mortgage Law Case Study: the UAE mortgage market Differences in real estate law between UAE and other jurisdictions Case Studies of real estate law and legal decisions Day 2: Property as an asset class All About Leases Nature and creation of leases Differences between types of commercial property leases Commercial leases and statutory control Residential tenancies and statutory control Structure of leases e.g. length of the lease period; including options for tenant alter

42 Real Estate Investment and Management - UAE Continued... ations and expansion Lease Calculations (with worked examples and exercises) Rent reviews and lease renewal options Covenants to leases e.g. repairing liability, occupancy conditions, sub-leases, termination, service charge provision Tenant Management Qualifying the prospective tenant financially Case Studies: Do Ratings Work? Marketing considerations for office buildings understanding the market, building a marketing plan, measuring marketing efficiency Group work: preparing a marketing plan for a commercial building in Dubai Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan Security deposits and other negotiation issues Inspections Effectively handling inquiries and complaints What to incorporate in tenant and director s meetings Group work: Handling tenant negotiations Housing and tenant management Bricks and Mortar Property Management Advanced Operations And Facilities Management Occupational Health And Safety Maintenance and Structural Preservation Procurement and Supply Chain Management Property Life Cycle Planning Sustainability and Real Estate Management Information Technology Staffing Management Contracts and Outsourcing Business Management Strategic business planning processes Business life cycle Analysing industry trends Examples of real estate investment and occupancy strategies for pension funds and companies Accounting and monetary practices Insurance Financial Management Principles Reporting procedures in the management of different kinds of properties Preparing profit-and-loss statements Tax implications; tax records; Cash flows; depreciation; investment tax credits; after-tax cash flow; Risk management and how to obtain proper insurance Accounting theory and methods Asset and liability valuations Budgeting and cash flow analysis Case Studies; principles of real estate management budgets Decision making based on cost data; industrial, commercial and property finance; ratio analysis Property accounting principles for investors (including IAS) Presentation to clients and management of client s accounts Case Study: financial management - outlining a property s sources of income and types of expenses and how they are accounted and reported Real Estate Strategy Principles of property management within the built environment and a business environment Private and public strategy for the management of property resources within an operational plan Case Study: Government real estate planning, institutions and strategies Application of legal and planning restrictions on asset enhancement Corporate property strategy Case Studies: Sale and Leaseback Ownership Forms and Goals Ways investors can own real estate and their

43 Real Estate Investment and Management - UAE Continued... expectations for this type of investment The role of real estate funds Operational Property Portfolio Planning Master, action and project planning Change management and relocations Selling property Group work: preparing a sales marketing plan for a commercial property Portfolio Analysis Comparison of risk return profiles of real estate and financial investment assets Measuring investment performance Principles of portfolio diversification The case for active portfolio management Application of property within a larger non-property investment market The nature of risk and return from property compared with bonds and equities Case Studies: portfolio management and property investment how much property should a fund hold? Course Conclusion

44 Real Estate Valuation - South Africa In-House or via Live Webinar Course Overview This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in South Africa, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation. Top 5 Learning Objectives Understand the most widely-practiced property income and capital valuation techniques Identify the cost of capital for real estate Successfully implement discounted cash flow valuation frameworks Acquire the ability to value a range of different types of properties Appreciate international differences in valuation approaches Day 1 Real Estate As An Investment Class Property Performance Analysis How is property measured? Identifying what makes a good property Problems and issues with performance evaluation Sources of data Evolution of data measurement International comparisons of performance Current issues in performance management Case Study: Best international practice in property performance measurement Property In The Investment Portfolio Concept of Modern Portfolio Theory (MPT) Measuring variance (Beta and equivalents) Constructing a portfolio Property correlation with other assets Best international practice on property in a portfolio International trends in property correlation Case Study: Pension fund and private equity investment in African property RICS Valuation Standards Appraisal of income property RICS Valuation Practices and international comparisons Comparison with corporate finance valuation Reporting according to IFRS standards Types of valuation approach Important aspects of the RICS Valuation Standards (including valuer independence) IFRS Valuation and Real Estate Concepts of fair value Accounting implications of the valuation of non-financial assets i.e. investment properties and property plant and equipment, leasing, impairment, and comparisons with equity Relevant IFRS standards for real estate 8 Operating segments 13 Fair Value 16 Property, plant and equipment 17 Leases Case Study: Does the transaction fall under IAS 17? If so, is it a finance or an operating lease? 23 Borrowing costs 36 Impairment 40 Investment property Case study: Deciding whether a property is an investment property Case Study: Ascertaining the reliability and accuracy of the values taken into financial statements in compliance with IFRS statements

45 Real Estate Valuation - South Africa Continued... Basic accounting decisions and their implications for preparers and users Choosing between the cost model and the fair value model Cost model: how to determine initial cost including borrowing costs and appropriate depreciation schedule Identifying relevant indicators for impairment review Estimating recoverable amount: Value in use versus Fair value less costs to sell Fair value model: Estimating fair values (a) of unique assets and (b) in illiquid markets Setting valuation assumptions Trading and development properties Case study: Property leases: some special issues and their impact on the financial statements Rent-free periods and other incentives Tenants improvements Step-up rents Disclosures, especially with regard to management judgements, impairment and revaluations Review of corporate accounts, GAAP and IFRS consolidation rules and other issues associated with SPVs Worked exercises: Comparing corporate annual reports with real estate values calculated Group discussion: Is valuation in South Africa adhering to best international practice? Residential Property Assessing Capital Value Why buy residential real estate? Does rental income matter for residential property? What are the main problems? Measurement criteria for residential real estate hedonic approaches Qualitative issues, competition, style and marketing Case Study: Residential price trends in South Africa comparative analysis Day Two Discounted Cash Flow For Real Estate Investments Net Operating Income (NOI) Gross and net income Differences in calculating NOI Overall capitalisation rate Capital expenditure issues Differences between property types Approaches to the cap rate Case Study: The band of investment approach Projecting Cash flows The dynamic behaviour of the 4-Q model: stability versus oscillations Real estate pricing behavior: backward or forward looking? Forecasting markets: univariate analysis, vector auto regressions, structured models. Forecasting examples The definition and evaluation of risk Case Study: Forecasting techniques Creating And Using A Detailed Discounted Cash Flow (DCF) Model Debt service and pre-tax cash flow The sinking fund Lease variations Differences between sectors Estimating resale value Terminal capitalisation rates Exercises: Delegates will use a number of real world examples to create and use spreadsheets for DCF valuation Real Estate Valuation and the cost of capital What is the significance of the cost of capital? Differentiation between debt and equity Hybrid products The pecking order theory of cost of capital Market derived cost of capital Case Study: estimating the cost of capital for a real estate company Land Prices Should land prices be calculated separately? How cyclical are land prices? Modelling land prices Empirical evidence on land prices Forecasting land prices Land price issues in South Africa Case Study: Data availability on land prices

46 Real Estate Valuation - South Africa Continued... The Cost Approach Type of costs Methods of evaluating costs Sources of cost estimation Incurable and curable depreciation Market extraction method Exercises: Delegates will use spreadsheet models to calculate a range of cost estimates for individual properties The Sales Comparison Approach Value, worth and price Sources of comparable data Identifying points of comparison and difference Sales comparison approach example Exercises: Using the sales comparison approach in practice Highest And Best Use Approach Definitions of HBU Site value Improved value Calculating HBU Case Study: Business Plan for a major project analysed Leasing Analysis Introduction to leases Exercises: Stop calculations, lease valuation and feasibility rents Applications Exercise: Delegates will study a range of real option calculations using customised spreadsheet models Does property possess real options? Examples of possible real estate real options Call Option approach to land value Samuelson-McKean approach Difficulties of measurement Potential benefits Exercise: Delegates will value a potential development on the basis of conventional DCF and real option analysis Valuation In Practice How is valuation practiced by chartered surveyors? What are the key elements of the RICS valuation guidelines? What is the evidence on valuation practice in COUNTRY? What to look for in a valuation report What are the differences between countries? Case studies: Examples of real estate valuation reports (RICS and others) Course Conclusion Analysing comparables Analysing rental prospects Exercises: Depreciation, net operating income and yield calculations Securing tenants in relation to valuation and finance Quality control and finance Forecasting and limiting operating costs Leases in Africa issues, the law and values Day Four Introduction To Real Options How to calculate real option value Comparing the Black-Scholes and Binominal Expansion model Real world examples Problems with real option calculation Application to distressed firms equity and other financial

47 Real Estate Valuation - Hong Kong In-House or via Live Webinar Course Overview This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in Hong Kong, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation. Top 5 Learning Objectives Understand the most widely-practiced property income and capital valuation techniques Identify the cost of capital for real estate Successfully implement discounted cash flow valuation frameworks Acquire the ability to value a range of different types of properties Appreciate international differences in valuation approaches Day 1 Real Estate As An Investment Class Property Performance Analysis How is property measured? Identifying what makes a good property Problems and issues with performance evaluation Sources of data Evolution of data measurement International comparisons of performance Current issues in performance management Case Study: Best international practice in property performance measurement Property In The Investment Portfolio Concept of Modern Portfolio Theory (MPT) Measuring variance (Beta and equivalents) Constructing a portfolio Property correlation with other assets Best international practice on property in a portfolio International trends in property correlation Case Study: Pension fund and private equity investment in ASPAC property RICS Valuation Standards Appraisal of income property RICS Valuation Practices and international comparisons Comparison with corporate finance valuation Reporting according to IFRS standards Types of valuation approach Important aspects of the RICS Valuation Standards (including valuer independence) IFRS Valuation and Real Estate Concepts of fair value Accounting implications of the valuation of non-financial assets i.e. investment properties and property plant and equipment, leasing, impairment, and comparisons with equity Relevant IFRS standards for real estate 8 Operating segments 13 Fair Value 16 Property, plant and equipment 17 Leases Case Study: Does the transaction fall under IAS 17? If so, is it a finance or an operating lease? 23 Borrowing costs 36 Impairment 40 Investment property Case study: Deciding whether a property is an investment property Case Study: Ascertaining the reliability and accuracy of the values taken into financial statements in compliance with IFRS statements

48 Real Estate Valuation - Hong Kong Continued... Basic accounting decisions and their implications for preparers and users Choosing between the cost model and the fair value model Cost model: how to determine initial cost including borrowing costs and appropriate depreciation schedule Identifying relevant indicators for impairment review Estimating recoverable amount: Value in use versus Fair value less costs to sell Fair value model: Estimating fair values (a) of unique assets and (b) in illiquid markets Setting valuation assumptions Trading and development properties Case study: Property leases: some special issues and their impact on the financial statements Rent-free periods and other incentives Tenants improvements Step-up rents Disclosures, especially with regard to management judgements, impairment and revaluations Review of corporate accounts, GAAP and IFRS consolidation rules and other issues associated with SPVs Worked exercises: Comparing corporate annual reports with real estate values calculated Group discussion: Is valuation in Hong Kong adhering to best international practice? Residential Property Assessing Capital Value Why buy residential real estate? Does rental income matter for residential property? What are the main problems? Measurement criteria for residential real estate hedonic approaches Qualitative issues, competition, style and marketing Case Study: Residential price trends in Hong Kong comparative analysis Day Two Net Operating Income (NOI) Gross and net income Differences in calculating NOI Overall capitalisation rate Capital expenditure issues Differences between property types Approaches to the cap rate Case Study: The band of investment approach Projecting Cash flows The dynamic behaviour of the 4-Q model: stability versus oscillations Real estate pricing behavior: backward or forward looking? Forecasting markets: univariate analysis, vector auto regressions, structured models. Forecasting examples The definition and evaluation of risk Case Study: Forecasting techniques Creating And Using A Detailed Discounted Cash Flow (DCF) Model Debt service and pre-tax cash flow The sinking fund Lease variations Differences between sectors Estimating resale value Terminal capitalisation rates Exercises: Delegates will use a number of real world examples to create and use spreadsheets for DCF valuation Real Estate Valuation and the cost of capital What is the significance of the cost of capital? Differentiation between debt and equity Hybrid products The pecking order theory of cost of capital Market derived cost of capital Case Study: estimating the cost of capital for a real estate company Land Prices Should land prices be calculated separately? How cyclical are land prices? Modelling land prices Empirical evidence on land prices Forecasting land prices Land price issues in Hong Kong Case Study: Data availability on land prices Discounted Cash Flow For Real Estate Investments

49 Real Estate Valuation - Hong Kong Continued... The Cost Approach Type of costs Methods of evaluating costs Sources of cost estimation Incurable and curable depreciation Market extraction method Exercises: Delegates will use spreadsheet models to calculate a range of cost estimates for individual properties The Sales Comparison Approach Value, worth and price Sources of comparable data Identifying points of comparison and difference Sales comparison approach example Exercises: Using the sales comparison approach in practice Highest And Best Use Approach Definitions of HBU Site value Improved value Calculating HBU Case Study: Business Plan for a major project analysed Leasing Analysis Introduction to leases Exercises: Stop calculations, lease valuation and feasibility rents other financial Applications Exercise: Delegates will study a range of real option calculations using customised spreadsheet models Does property possess real options? Examples of possible real estate real options Call Option approach to land value Samuelson-McKean approach Difficulties of measurement Potential benefits Exercise: Delegates will value a potential development on the basis of conventional DCF and real option analysis Valuation In Practice How is valuation practiced by chartered surveyors? What are the key elements of the RICS valuation guidelines? What is the evidence on valuation practice in COUNTRY? What to look for in a valuation report What are the differences between countries? Case studies: Examples of real estate valuation reports (RICS and others) Course Conclusion Analysing comparables Analysing rental prospects Exercises: Depreciation, net operating income and yield calculations Securing tenants in relation to valuation and finance Quality control and finance Forecasting and limiting operating costs Leases in Hong Kong issues, the law and values Day Four Introduction To Real Options How to calculate real option value Comparing the Black-Scholes and Binominal Expansion model Real world examples Problems with real option calculation Application to distressed firms equity and

50 Real Estate Valuation - UAE In-House or via Live Webinar Course Overview This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in UAE, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation. Top 5 Learning Objectives Understand the most widely-practiced property income and capital valuation techniques Identify the cost of capital for real estate Successfully implement discounted cash flow valuation frameworks Acquire the ability to value a range of different types of properties Appreciate international differences in valuation approaches Day 1 Real Estate As An Investment Class Property Performance Analysis How is property measured? Identifying what makes a good property Problems and issues with performance evaluation Sources of data Evolution of data measurement International comparisons of performance Current issues in performance management Case Study: Best international practice in property performance measurement Property In The Investment Portfolio Concept of Modern Portfolio Theory (MPT) Measuring variance (Beta and equivalents) Constructing a portfolio Property correlation with other assets Best international practice on property in a portfolio International trends in property correlation Case Study: Pension fund and private equity investment in Middle Eastern property RICS Valuation Standards Appraisal of income property RICS Valuation Practices and international comparisons Comparison with corporate finance valuation Reporting according to IFRS standards Types of valuation approach Important aspects of the RICS Valuation Standards (including valuer independence) IFRS Valuation and Real Estate Concepts of fair value Accounting implications of the valuation of non-financial assets i.e. investment properties and property plant and equipment, leasing, impairment, and comparisons with equity Relevant IFRS standards for real estate 8 Operating segments 13 Fair Value 16 Property, plant and equipment 17 Leases Case Study: Does the transaction fall under IAS 17? If so, is it a finance or an operating lease? 23 Borrowing costs 36 Impairment 40 Investment property Case study: Deciding whether a property is an investment property Case Study: Ascertaining the reliability and accuracy of the values taken into financial statements in compliance with IFRS statements

51 Real Estate Valuation - UAE Continued... Basic accounting decisions and their implications for preparers and users Choosing between the cost model and the fair value model Cost model: how to determine initial cost including borrowing costs and appropriate depreciation schedule Identifying relevant indicators for impairment review Estimating recoverable amount: Value in use versus Fair value less costs to sell Fair value model: Estimating fair values (a) of unique assets and (b) in illiquid markets Setting valuation assumptions Trading and development properties Case study: Property leases: some special issues and their impact on the financial statements Rent-free periods and other incentives Tenants improvements Step-up rents Disclosures, especially with regard to management judgements, impairment and revaluations Review of corporate accounts, GAAP and IFRS consolidation rules and other issues associated with SPVs Worked exercises: Comparing corporate annual reports with real estate values calculated Group discussion: Is valuation in UAE adhering to best international practice? Residential Property Assessing Capital Value Why buy residential real estate? Does rental income matter for residential property? What are the main problems? Measurement criteria for residential real estate hedonic approaches Qualitative issues, competition, style and marketing Case Study: Residential price trends in UAE comparative analysis Day Two Gross and net income Differences in calculating NOI Overall capitalisation rate Capital expenditure issues Differences between property types Approaches to the cap rate Case Study: The band of investment approach Projecting Cash flows The dynamic behaviour of the 4-Q model: stability versus oscillations Real estate pricing behavior: backward or forward looking? Forecasting markets: univariate analysis, vector auto regressions, structured models. Forecasting examples The definition and evaluation of risk Case Study: Forecasting techniques Creating And Using A Detailed Discounted Cash Flow (DCF) Model Debt service and pre-tax cash flow The sinking fund Lease variations Differences between sectors Estimating resale value Terminal capitalisation rates Exercises: Delegates will use a number of real world examples to create and use spreadsheets for DCF valuation Real Estate Valuation and the cost of capital What is the significance of the cost of capital? Differentiation between debt and equity Hybrid products The pecking order theory of cost of capital Market derived cost of capital Case Study: estimating the cost of capital for a real estate company Land Prices Should land prices be calculated separately? How cyclical are land prices? Modelling land prices Empirical evidence on land prices Forecasting land prices Land price issues in UAE Case Study: Data availability on land prices Discounted Cash Flow For Real Estate Investments Net Operating Income (NOI)

52 Real Estate Valuation - UAE Continued... The Cost Approach Type of costs Methods of evaluating costs Sources of cost estimation Incurable and curable depreciation Market extraction method Exercises: Delegates will use spreadsheet models to calculate a range of cost estimates for individual properties The Sales Comparison Approach Value, worth and price Sources of comparable data Identifying points of comparison and difference Sales comparison approach example Exercises: Using the sales comparison approach in practice Highest And Best Use Approach Definitions of HBU Site value Improved value Calculating HBU Case Study: Business Plan for a major project analysed Leasing Analysis Introduction to leases Exercises: Stop calculations, lease valuation and feasibility rents other financial Applications Exercise: Delegates will study a range of real option calculations using customised spreadsheet models Does property possess real options? Examples of possible real estate real options Call Option approach to land value Samuelson-McKean approach Difficulties of measurement Potential benefits Exercise: Delegates will value a potential development on the basis of conventional DCF and real option analysis Valuation In Practice How is valuation practiced by chartered surveyors? What are the key elements of the RICS valuation guidelines? What is the evidence on valuation practice in COUNTRY? What to look for in a valuation report What are the differences between countries? Case studies: Examples of real estate valuation reports (RICS and others) Course Conclusion Analysing comparables Analysing rental prospects Exercises: Depreciation, net operating income and yield calculations Securing tenants in relation to valuation and finance Quality control and finance Forecasting and limiting operating costs Leases in Middle East issues, the law and values Day Four Introduction To Real Options How to calculate real option value Comparing the Black-Scholes and Binominal Expansion model Real world examples Problems with real option calculation Application to distressed firms equity and

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