Binkert 3.0

Question 1

If you were an investor - which 2 learnings would you take away and use for your future investments?

Answer 1

• RE ist anticyclical -> if rest doesn’t go well, people are going to invest in real estate
• predictions of RE markets are very difficult

Question 2

What Toolkit can we use for cost & return, Profit & Loss?

Answer 2

• Beer coaster method
• static cost method
• dynamic cost method
• > for the cost side
• market knowledge
• guts and experience
• gambler spirit

Question 3

What is FAR?

What is the average FAR in CH?
What is the average landprice in CH?
What is the average landprice in agricultural land in CH?

Answer 3

Floor area ratio

Average FAR in CH is 0.3
Average landprice in CH is 1’000 per m2
Average land price in agrigultural land is CHF 8

Question 4

Beer Coster method

Answer 4

CHF 2’000 Residualwert - 10% von Ertragswert als Risiko = 1’000
CHF 10’000 Ertragswert Brutto (300 x 2 = 600 -> kapitalisiert mit 6&)
CHF 8’000 Kosten (CHF 4’000 im Schnitt x 2)

Question 5

Value vs. price
-> which relative?
-> which is absolute?

Answer 5

Value depends on the relationship between the valuation object and the valuation subject -> relative

Price is the subjective value a market is prepared to pax at a given time -> absolute

Question 6

What is the average cost of real estate in the swiss “lowlands” (Flachland)?

How high are the sales of real estate per m2?

Answer 6

4’000 - 5’000 CHF/m2 GF

6’000 - 15’000 CHF / m2 NF

Question 7

What are the creditable areas?

Answer 7

Question 8

If there were 9 mio. people in CH, and we have a density of 0.3, is it ok?

Answer 8

On average a person uses 100m2 (for everything)
Therefore 100m2 x 9 mio. = 900 mio.
density is 0.3
2.7 million km2 is used
41 million km2 we have in ch
-> yes it is ok

Question 9

What is the difference between hard and soft costs?

Answer 9

• hard costs for the constr. itselfs, such as materials
• soft costs: architect, etc.

usually 80% hard, 20% soft

Question 10

Composition of interest rate
How much is it for a:
- mixed-use project (60% rented)
- single tenant project
- city hotel

Answer 10

Endogenous factors:
- object-specific

Exogeneous facotrs:
- location-related
- economic
- cyclical

mixed-use: 5%
single tenant: 4%
hotel: 7%

Question 11

Elements of the capitalisation rate (static)

Answer 11

Question 12

Elements of the discount rate (dynamic)

Answer 12

Question 13

DCF: evaluation discount rate, what are the advantages and disadvantages

Answer 13

Advantages:
- Exact market values through exact mapping of cashflows and object-specific condition
- great transparency if appropriately represented
- suitable procedure also for recurring evaluations

Disadvantage:
- withouth experience and data, no reliable evaluation results is possible
- Different DCF models / little benchmark availability
- daring prediction can lead to uncertain evaluation results

-> discount rate has a great effect on the DCF-value
-> be careful in the determination