Freyo Group Market Report
Assignment Task 1
Part 1 – (a) Market Report (40% of total module marks)
The Freyo Group is a fund established in 1996 with €1.5bn of assets under management . They provide real estate lifecycle asset management services tailored to meet the needs of their investors including asset sourcing, prudent capital structuring and identification of value creation opportunities through pro-active management. They deliver their projects through close-ended funds or co-investment partners comprising leading sovereign wealth funds, pension funds and private equity companies.
Freyo operate across all major western European real estate markets with a network of interconnected and experienced professionals operating in markets well known to the partners in order to deploy capital efficiently using local network to source opportunities.
They are looking for well-located core plus and value added opportunities in major cities driving value by active management. They currently invest in 3 main sectors office (54%), retail (35%) and hotel (11%)
You are to advise the fund partners on a potential prime investment opportunity in the office sector in a UK city. The fund is already satisfied as to your business’s suitability as property advisors to their portfolio and they are happy with the past performance you have produced for other clients. The fund is looking for high quality property assets in the UK up to £40m.
Your instructions are to write to the fund partners, in a formal way advising on the market value for purchase of a freehold interest in a multi let office investment (minimum of two tenants) located in a city close to similar commercial property, from which you will draw your comparables.
You are to prepare a report in line with the mandatory requirements for valuation reports as set out in the RICS Valuation Global standards 2017 (Red Book) advising Freyo Group of the market value for purchase of your chosen investment. Your report should include:
- Market analysis of the current and the expected demand & supply ( Surveying Consultancies produce market reports)
- A schedule of comparables appropriately analysed in the appendix with commentary on analysis and results of analysis to support assumptions in the main report (see RICS Information paper on Comparable approach and ensure to distinguish between headline and effective rent in your analysis to estimate market rent)
- Fully justified assumptions and a summary valuation with recommended bid price in the main report
- VALUATION DATE IS 1st November 2018
- One detailed traditional valuation of each tenancy in the appendix
- Recommendations on ways in which the asset to be purchased may be proactively managed to increase the value in the future
4.4 Assessment Criteria for Task 1: Individual Market Report 40%
Assessment of your submission will be based on the weighted criteria as given below. These comprise both generic and specific Assessment Criteria and relate to your module learning outcomes. Please note that 5% of the mark will be allocated to your participation in the feed forward session.
| Generic Criteria | Marks available |
| Communication: Presentation & Structure (beginning to reach a professional standard). Accurate Spelling; Good grammar and sentence and paragraph construction; evidence of editing and proof reading; Writing style appropriate to task (report; essay; etc); work well structured | 9 |
| Referencing and Citation: Demonstrates clear understanding and use of Harvard referencing; makes good use of references to literature in the body of the work. | 8 |
| Research: evidence of wider reading round the subject; list of references quite substantial; use of books and professional literature and beginning to use academic literature through search engines; developing appreciation of the quality of literature. | 8 |
| Participation in the feed forward session | 5 |
| Specific Criteria | |
| Understanding of current issues in the property market and the factors affecting performance of your selected property sector | 15 |
| Ability to analyse comparables appropriately with justified commentary | 20 |
| Ability to apply an appropriate traditional valuations model to your chosen property correctly with fully justified assumptions | 30 |
| Appropriateness of your bid price and quality of your recommendations on how to create value by pro-active management | 5 |
| Total Marks | 100 |