Real Estate Investor Magazine South Africa May 2013

MANAGING BY JONATHAN SMITH Paper Begone... Converting to modern software R eal estate investment managers should, ideally, keep abreast of the latest data across a wide spectrum of information within their property investment portfolio and, thanks to modern soft ware, this is possible via a live (or real time) concept known as a dashboard. A dashboard replaces the voluminous paper reports that shareholders and directors would receive each month end and have to examine so as to provide direction to their property management team. Now stakeholders (and, particularly investment managers) can see at glance the relevant data of their property portfolio in a single screen. Should they also require more detail on the summarised statistics, they can drill down to ref lect specific data. The following information would typically be ref lected on a property asset management dashboard, having been compiled by totalling and analysing line data from each building, premises and tenant within a set of buildings: • • • The income-capitalised value of a property portfolio (or just one building) The risk profile of your portfolio – reflecting items such as expiry profile, vacancies, arrears and a calculated risk premium to your capitalisation rate A tenancy profile – reflecting the make-up of your tenancy base by tenant category and a • • • depiction of group tenants. Examples of group tenants would be the Edcon and Foschini groups An operating cost profile which depicts the current dispersion in costs across your portfolio or a building An indication of outstanding maintenance projects, their progress to completion and their outstanding values for payment A set of reminder or diary notes which reflect information which asset managers should be following up on. The following diagrams ref lect such data in a user-friendly manner and should form the basis of each property asset (investment) managers’ dashboard. PETER PLACE MALL ASSET MANAGEMENT DASHBOARD AREA (SIZE) OF DEVELOPMENT 32, 347 square metres NET OPERATING INCOME and VALUE ARREARS RATE PER SQUARE METRE CURRENT MONTH 174, 059 NORMALISED TOTAL GROSS INCOME 52, 217, 772 134.53 NORMALISED TOTAL EXPENSES 17, 393, 201 44.81 0.35% TOTAL NET INCOME 34, 824, 571 89.72 60 DAYS MARKET CAPITALISATION RATE 9.00% 208, 871 RISK PREMIUM 0.19% 0.42% CAPITALISED VALUE 378, 939, 837 90 DAYS 11.715 250, 645 OPERATING EFFICIENCY 66.69 0.56% RISK PROFILE RISK PREMIUM TO CAPILTALISATION RATE 0.19% EXPIRY PROFILE AREA (SIZE) GROSS ANNUALISED INCOME EXPIRY PROFILE IMPACT UPON VALUE IF NOT RENEWED CENTRE VALUE IF NOT RENEWED 307, 604, 249 EXPIRED EXPIRED 7, 801, 069 14.94% 71, 335, 587 EXPIRES WITHIN 6 MONTHS EXPIRES WITHIN 6 MONTHS 875 2.71% 3, 400, 979 6.51% 2, 930, 486 376, 009, 351 EXPIRES WITHIN 12 MONTHS EXPIRES WITHIN 12 MONTHS 2, 660 8.22% 4, 439, 243 8.50% 3, 008, 943 25628 79.23% 34, 089, 920 65.28% 20, 309, 571 868 2.68% TOTALS 32,347 100.00% 2.71% 358, 630, 265 VACANCIES VACANCIES 7.16% NEXT 6 MONTHS 375, 930, 894 EXPIRES OVER 12 MONTHS EXPIRES OVER 12 MONTHS 42 2, 316 7.16% EXPIRED May 2013 SA Real Estate Investor NEXT 12 MONTHS 8.22% OVER 12 MONTHS 79.23% VACANT 2.68% 49, 731, 211 95.24% www.reimag.co.za

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