Real estate investment is very attractive. Particularly in a climate featuring a strong economy and a very low level of interest rates.
The German real estate market satisfies these requirements very well. However, merely the ownership of real estate does not guarantee financial success. On the contrary, a holistic and comprehensive management approach is necessary to ensure that real estate investments are successful. In addition to a lot of know how, many years of experience and a network, the right organisation is also a key criterion in this respect.
In order to satisfy these criteria, investors are able to use their own structures (if they exist) or use service providers specialising in the management of real estate.
The legal background of the investor is irrelevant, nor does it matter whether the investor is based in Germany or abroad. The holistic and comprehensive management approach requires the basic commercial services and in particular special expertise in building and project management (refurbishment), letting and sales of real estate. This site considers itself to be a platform for providing and exchanging information concerning the subject of asset management.
All interested parties are invited to participate actively in a dialogue process. Curious for information concerning the wide range of possibilities and information - the practical examples offer a wide range.
The range of services of asset management is varied and provides numerous opportunities. Real estate investors are able to use a wide range of instruments for optimising their returns.
By themselves or by means of a professional asset manager. The main value drivers include revitalisation, transaction management and letting management.
Before re-letting and subsequently before the sale, the two essential management service functions of asset management, the revitalisation of office buildings constitutes a further (primarily construction-related) core value driver for the sustainable growth in the value of commercial real estate. The condition of a property and also the extent to which a property is adapted to its envisaged utilisation determine the level of rent which can be generated with the property.
In order to implement a meaningful revitalisation concept, the asset manager must have extensive real estate and market knowledge in the fields of project development and project management. The asset manager will first assess the property- and market-specific circumstances and develop a concept which comprises a range of measures, including a plan of action which focusses on profitability. The quality of the experienced asset manager is revealed in the process of implementing such a concept. This is because it requires co-ordination of the requirements of structural issues and official authorities (approval planning) and in particular commercial skills. Timely implementation within budget for existing properties also imposes extremely stringent demands on project management.
At the same time, the asset manager also works on re-letting or marketing the properties during the period in which the revitalisation concept is being implemented.
The asset manager or a transaction manager in an asset management company is frequently also responsible for supporting the purchasing and sales processes of the properties. Transaction experience and skill are very beneficial for the customer. The experience of an asset manager in the transaction field is also reflected in the extent to which he is also able to develop an accurate overall picture of large or complex properties from a very large quantity of data in order to use such information to identify the marketability of the property and also the possible price. In this respect, it is beneficial if the asset manager has a local representative or is at least very well networked locally.
A valid property appraisal is thus the basis of the actual investment or disinvestment decision. Speed and local presence are extremely important in this respect, particularly in liquid
markets in order to be able to survive in the context of other professional potential purchasers.
The ability of the asset manager to access the market is also a further major criterion in this respect. As a result of the high transaction costs and the considerable amount of work involved in a real estate transaction, the reliability of the transaction partner is extremely important for all parties involved. The market players with an extensive track record enjoy considerable market advantages. They receive offers to buy property at an early stage, occasionally on an exclusive basis, which means that preference might be given to one specific player within a group of
Once the property has been acquired and included in a portfolio, the next step is to focus on optimising economic considerations. Letting management has a key role to play in this respect, because the letting process generates the income flows which represent the return on capital employed during the period in which the property is held.
Professional letting is a complex process and starts with the development of a property profile for marketing the properties. A property-specific marketing concept is a key element of this process. The letting process involves specific negotiations regarding the tenancy agreement, and results in the signing of the tenancy agreements. Based on a wide range of practical experience, the process of developing a tenancy agreement draft is complicated and in certain cases very time-consuming.
A wide range of competences is required in this respect, e.g. market knowledge, research analyses, contact with potential tenants, selection and management of competent agents, negotiating skills, speed in processing and the advanced formulation of tenancy agreements for both parties.
Property-specific specialist knowledge is necessary for successful letting. One important aspect is knowledge of the tenancy markets,
because letting is always a regional activity which is only perfectly managed by a person who has established a local presence and who has contact with the other players in the market. Interdisciplinary property experience also has a major role to play in this respect. Anybody who provides professional support for a large portfolio of commercial real estate precisely knows the needs of the tenants, and is able to anticipate trends and market changes. This is an advantage when the aim is to successfully market premises.
However, other criteria are also important, such as the ability to draw up tenancy agreements with a good legal structure. The quality of the tenancy agreements can enhance value in the subsequent sales process, resulting in higher selling prices. Functioning and successful letting management is a quality feature of excellent asset management.