Retail Property Appraisals Course

This course takes participants step by step through the creation of a full shopping centre cash flow model. As a modelling course it is almost entirely Excel based. The course starts by analysing the variables that influence shopping centre investment returns. Participants will calculate Key Performance Indicators (KPIs) that can be shown to influence the financial model from Tenancy through to Risk.

CONTENT

Retail Property Models

• What makes retail property models unique?
• Input Variables and the Profit Cycle
• Financial Model Layout and Design
• Understanding the nature of Retail Property Cash Flows

Advanced Cash Flow Modelling

• Internal Rate of Return (IRR), Net Present Value (NPV) and other metrics
• The three Rent Function methods
• Logic Functions and Arrays
• Multi-let Cash Flows
• Multiple and Period Varying Growth Rates

Retail Property Rent Functions

• Common Retail Property Lease Covenants
• Retail Tenancy Schedules
• Zone A calculations
• Turnover, affordability ratios and rental capture
• Rental Growth, inflation and fixed rent
• Rent Functions and Rent Projection

Analyzing the Tenancy Schedule

• Hypothetical study of ‘The Galleries’ Shopping Centre
• Unit Plan and Micro Location
• Using Excel as a database and linking to external data sources
• Data visualisation methods
• The Bayfield Retail Quilt (Tenant Mix Analysis)
• Lease Expiry Profiles and Event Analysis

• Choosing the Retailer Classification
• Cross Referencing Consumer Classification
• Completing the Tenancy Schedule
• Generating Typologies from tenancy schedules

Rent Functions for Shopping Centres

• Breaking Complex rent functions from existing models
• Planning the rent function
• Events and Rents Table formulae
• Full Rent Function

Full Project Cash Flow

• Scenario Testing and Risk Analysis
• Building a rent function for the case study shopping centre
• Testing the rent function
• Creating CAPEX and OPEX functions for the case study
• Calculating IRR, NPV and other Investment Metrics
• Testing the IRR for errors

Footfall and Performance Metrics

• Destination capacity calculations
• Footfall Signatures
• Peak hour performance
• Performance Metrics

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.