This training course is split into two modules:

Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Modules I, and II back-to-back as a 2-week training course.

DAILY AGENDA

Module I: Real Estate Market Analysis & Appraisal

Day 1: Market Analysis
  • Real estate strategy
    • Real estate sectors and their performance
    • Available data in Saudi and the region
    • Sources of real estate information
    • Calculating and using real estate indices
  • Comparing real estate developer strategies
  • Key risks for real estate development and investment
  • Political risk
  • Analysing economic cycles and foreign exchange risk
  • Technological threats and opportunities
  • Cultural and organizational issues
  • Analysing real estate markets
    • Urban economics and city development
    • City plans and their significance
    • Localities and values
    • Competitor SWOT analysis
    • Demand and supply: pipelines, rent and occupancy levels
    • How to forecast real estate: qualitative and quantitative techniques
Day 2: Planning and Financial Analysis
  • Planning for development
    • Zoning, planning permission and building permits
    • Highest and Best Use (HBU) studies
    • Navigating the planning process
    • Planning timelines, regulations and approvals
  • Estimating costs
    • Evaluating and benchmarking land costs
    • Regression analysis for land valuation
    • Construction cost determination, modelling and audit
  • Financing
    • Corporate vs Real Estate finance
    • The role of SPVs Bank financing and bank ratios
    • Sectoral differences in lending
    • Equity investment, joint ventures and cashflow waterfalls
  • Assessing Performance
    • Ratio-based tools (ROA, ROI and others
    • NPV and IRR and their use in practice
    • Examples of financial models
  • Risk analysis (sensitivity, scenario and Monte Carlo)
Day 3: Property Assessment
  • Analysing individual properties
    • Classifying real estate
    • The regulatory framework for real estate analysis
    • The role of the chartered surveyor
    • RICS and Taqueem valuation standards analysed and compared
  • Valuation techniques
    • Discounted Cashflow – forecasting market trends
    • Options based valuation
    • Comparables, valuations, sales and hedonic valuation (location, size, age, type and other variables)
    • Cost methodologies
    • Combining techniques for valuation accuracy
  • The role of the surveyor
    • Content of property surveys
    • Assessing quality
    • Accessing and reviewing property maintenance and capex records
    • Key due diligence issues
Day 4: Assessing Income Potential
  • PGI, EGI and NOI – calculating and forecasting income
  • Advantages and disadvantages of Excel
  • Integrating externalities and the valuation of multiple properties
  • Advanced DCF Valuation in Real Estate
    • RICS Valuation principles, comparisons with Dubai and elsewhere in the Gulf
    • Differences between the use of techniques for valuation and investment
    • DCF Valuation and modelling
    • Principles of DCF modelling (including NOI, cap rates, cost of capital, land prices and forecasting cashflows)
    • Presentation of DCF model including Assumptions, Operations, Senior and Junior Debt
    • Examples of DCF valuation from the Gulf
  • Multiples based valuations
    • Ratio (multiples) analysis and the selection and use of comparables.
    • Examples of multiple analysis from the Gulf
  • Forensic Financial Analysis for Real Estate
    • DCF model complexities (including taxation, depreciation, leases and examples of SPV models)
    • Use of hedonic and regression models for real estate valuation
    • How to analyse and audit DCF and multiples valuations and investments
  • Risk Analysis
    • Objectives and results of risk analysis
    • Application of methodologies (sensitivity analysis, scenarios and Monte Carlo) to the completed DCF valuation model
    • Advantages and disadvantages of different methods
Day 5: Legal Analysis and Valuation Reports
  • Tenancies and the law
    • Freehold, leasehold and other legal issues (e.g., easements, fixtures)\
    • The analysis of tenancies
    • Tenancy renewals and options
  • Valuation Reports
    • Preparation and content of a valuation report
    • Deciding on the validity and status of valuation reports
    • Differences between jurisdictions and sectors
    • How to audit a valuation report

Module II: Real Estate Finance & Investment

Day 6: Overview of Real Estate Finance And Invest
  • An international overview of real estate market.
  • Banking and real estate.
  • Fund managers.
  • Valuation standards.
  • Investment value.
  • Mortgage lending value.
  • Sales comparison approach.
  • Cost approach.
  • Income approach.
Day 7: Source Of Finance For Real Estate
  • Potential funding sources for real estate
  • Long term source of finance
  • Short term source of finance
  • Evaluation of the types of finance in real estate
  • Equity finance
  • Debt finance available for real estate
  • How to estimate the Cost of Weighted Average Cost of Capital (WACC) for real estate firms.
  • Application of Capital Asset Pricing Model (CAPM) in real estate.
  • Measures of risks in real estate investments.
Day 8: Investment Decisions In Real Estate.
  • The principal of cash flow forecast
  • Evaluating real estate investment decision using:
  • Payback
  • Accounting Rate of Return (ARR)
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR)
  • Analysing real estate Investment Decision using:
    • What If Analysis
    • Sensitivity Analysis
  • Simulation
  • Applying Economic Value Added to real estate investments.
Day 9: Asset Allocation Strategies In Real Estate Investment
  • Investment opportunities in real estate.
  • Real estate required rate of return.
  • Sustainable investment strategies.
  • Risk and return of real estate investments.
  • Portfolio theory application in real estate business.
  • Estimation of systematic risk for real estate firms.
Day 10: Assessment Of Business Performance In Real Estate
  • Ratio analysis for real estate business.
  • Management’s point of view.
  • Owners’ point of view
  • Lenders’ point of view
  • Ratios as a system – pyramids of ratios
  • Integration of real estate financial performance.
  • Predicting financial distress for real estate firms.

 

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Certificate

  • On successful completion of this training course, KC Academy Certificate will be awarded to the delegates.