Asia Real Estate Workshop

"The course is being structured perfectly, the trainer is very knowledgeable on all topic covers. Overall, the 3 day course is excellent!" Officer, Brunei Investment Agency Course Background In this 3-day course you will learn the fundamental investment and financing techniques associated with real estate products, understand how to select, assess and evaluate appropriate financial alternatives, and gain an insight and grasp of the key drivers of the Asia real estate market. A special focus has also been put on issues related to real estate private equity and cross-board transactions and related issues. At the end of this course you will: Understand Asian real estate capital markets; public/ private debt and equity structures and valuation techniques Enhance profitability with cutting-edge real estate models, strategic structures and proven value added techniques Value multiple real estate assets and developments while utilising the Three Appraisal Approaches Recognize the pros and cons of direct, private equity, fund and REIT structures Identify the risks and rewards associated with alternative real estate products, locations, structures and strategies Receive updates on the Asia real estate market and where it’s headed Create, analyse and comprehend complex development and existing asset models and structures Learn acquisition, allocation and disposition strategies Methodology At each point in the course, learning is consolidated through practical case studies. Active participation is encouraged to ensure understanding and reinforce concepts. Prerequisities Participants are not required to have specific prior experience with Asia real estate. More experienced individuals will be able to build on their knowledge through practical, current case studies. Who Should Attend? This training course is specifically designed for decision makers in all organisations and aimed mainly at: CEOs, CFOs, COOs with responsibility for strategic management Investment bankers Real estate consultants Financial analysts Institutional investors Retail investors CFA candidates Supporting publication
Day 1 Overview of Asia real estate The impact of the economic environment and investment climate on real estate returns International factors, government policy and interest rates Characteristics of the realestate market sectors (residential, commercial, retail and industrial) and their associated drivers Real estate as an asset class vs. other asset classes The listed and unlisted real estate markets (advantagesas and disadvantages) The roles and motivations of participants The macroeconomic trends relevant to Asia real estate Public and private debt financing Characteristics of private and public markets Different classifications of debt Various forms of debt and equity within a capital structure The role of financial leverage in real estate investment Asia Real Estate Workshop The risk/benefits of debt leverage Considerations of basic ownership structure The basis for making projections of future cash flows depending upon market trends and specific property information The characteristics of the capital market - debt/ equity and public/ private Debt financing Types/ structure Lending institution Financial leverag Bank debt vs. Securitisation - CMB Development financing Mezzanine financing Ownership structures Distressed assets Case study: Real estate debt underwriting of an en-bloc residential development in Singapore Alternatives to debt finance: Private funds and listed vehicles - corporates, REITs Day 2: Equity valuation of listed developers and REITs Basic methodology of discounted cash flows Net Present Value (NPV) Internal Rate of Return (IRR) Payback period Other investment decision criteria Physical real estate valuation NOI and cap rate Capital market valuations Calculating the cost of equity, cost of debt and Weighted Average Cost of Capital (WACC) What is cost of capital? Cost of equity, cost of debt and WACC when to use which one Computing the beta for a stock Estimating the risk free rate Estimating the equity market risk premium The concept of a tax shield Why capital structure is important Computing WACC Discounted cash flow (DCF) valuation Computing free cash flow Determining terminal value using different methods Determining fair value Sensitivity analysis Case study: Real estate valuation of a Thailand developer involved in an M&A transaction Comparable methods Price to earnings - not all P/Es are created equal Price to book Price to sale Price to cash flow EV/EBITDA ratio Sum of the parts valuation (SOTP) How to value the different parts of the business Case study: Based on the capitaland business model SOTP valuation REIT valuation Explain dividend yield Net asset value REIT comparables Day 3: Asia private equity and cross border real estate Introduction to Asia private equity How to calculate expected IRR Merits and considerations of deal structuring Identify exit opportunities Case study: Linking executive compensation to performance Cross border real estate International investing Why do it? What are the forms? Potential differences Fundamentals Accepted lease terms Bank attitude/ rules Land title differences Tax concerns IFRS vs. GAAP Cross border due diligence How to conduct due diligence Success factors for due diligence What due diligence doesn’t tell us