Financial Modelling for Real Estate Finance

Erscheinungsjahr 2011
ISBN: 978-1-84374-877-9
Verlag: Euromoney

Buch, Englisch, 112 Seiten

Over the past decade there has been a huge volume of real estate construction, especially in the Middle East, but much of this has been without much understanding or planning, and without the necessary financial modelling to underpin investment decision-making. The consequence of this lack of planning has often been disastrous. Real estate construction or investment requires a high level of expertise in building financial models if the building is to be profitable. The book takes the example of the construction of an office tower, and contains three self-contained models - Construct and Sell, Construct and Let, and Buy and Let. The user can build step-by-step either from scratch or using templates to cover such issues as how to model the role of debt, debt covenants, cash waterfalls, inter-creditor relations, how to model risk, and the role of equity and its rewards. This book is designed for all those who work in real estate companies, construction companies, accountancy firms, valuers, advisory firms and others who are faced with the need to build financial models of real estate developments in Excel.
It will also prove useful for those such as lawyers who have jobs that relate very closely to the financial model of real estate developments and for whom Excel models have sometimes been unknown territory. The book has been put together with the assumption that the user has a minimal knowledge of Excel. All the necessary Excel techniques are explained. The objective of the book is to provide a step-by-step guide to constructing a financial model for a real estate development - in this case, an office.

Autoren/Hrsg.

Roche, Julian

Fachgebiete

• Wirtschaftswissenschaften Wirtschaftssektoren & Branchen Immobilienwirtschaft
• Wirtschaftswissenschaften Betriebswirtschaft Unternehmensfinanzen Finanzierung, Investition, Leasing
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Unternehmensfinanzierung

Inhaltsverzeichnis

Contents 1 Real estate development overview 2 Real estate investment 3 Excel for financial modelling 4 Key issues in real estate modelling Inputs and assumptions - the inputs sheet Operations Sale data The calculation of debt repayment Before tax cash flows (investment models) After tax cash flows Valuation 5 The Emerald Tower Project Introduction Step by step model construction History of the Emerald Tower Project 6 The CS (construct-sell) model CS assumptions (CS Office Model 1) CS construction cash flow (CS Office Model 2) CS calculating the value on sale (CS Office Model 3) CS debt and equity drawdown (CS Office Model 4) CS taxes and valuation (CS Office Model Final) 7 The CL (construct-let) model CL assumptions (CL Office Model 1) CL net operating income cash flow projection (CL Office Model 2) CL debt amortisation (CL Office Model 3) CL taxes and depreciation (CL Office Model 4) CL discounted cash flow (CL Office Model Final) 8 The BL (buy-let) model BL assumptions (BL Office Model 1) BL operations (BL Office Model 2) BL debt amortisation (BL Office Model 3) BL junior debt amortisation (BL Office Model 4) BL cash flows (BL Office Model 5) BL valuation (BL Office Model Completed) 9 Risk Sensitivity analysis Scenario analysis Monte Carlo analysis Conclusion about risk 10 Background papers CS CS Exercise: Daribaca market analysis: April 2005 CS Construction cost exercise CS Macroeconomics CS Construction costs for comparable projects CS Lending policy 11 Background papers CL CL Exercise: Daribaca revised market analysis: April 2008 CL Revised lending policy CL Worked tax example CL Revised assumptions CL Depreciation schedule 12 Background papers BL BL Exercise: Daribaca final market analysis: April 2011 BL Revised assumptions BL Final lending policy