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APC ASSESSMENT > Strategic Real Estate Consultancy (Level 3) > Flashcards

Strategic Real Estate Consultancy (Level 3) Flashcards

1
Q

What is the role of real estate?

A

Real estate plays a vital role in helping most businesses and organisation to achieve their strategy and objectives. It drives collaboration, improves efficiency, and a physical tool for marketing the brand. It is often the second largest operating expenses for organisations.

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2
Q

What is a real estate strategy?

A

A strategy reviewing how a real estate portfolio can be optimised and used to help a company reach its objectives and goals.

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3
Q

How do businesses measure performance?

A

Businesses will typically have KPIs to track relevant business metrics to show progress of business goals. Setting goals may include increasing profit margin, increasing efficiency, or capturing bigger market share.

KPIs could look at operating margin, net profit margin, return on capital, or benchmarking against industry standards, processes or comparable evidence.

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4
Q

Lease Regear, Edinburgh - Why did you advise the client on regearing the lease?

A

It was coming to the end of the assets 5-year business plan, the final step of the business plan was to execute the sale. The key client objective was to regear the anchor tenant’s lease in order to maximise the value of the asset, increasing the WAULT.

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5
Q

Lease Regear, Edinburgh - How does increasing the WAULT increase the Market Value?

A
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6
Q

Lease Regear, Edinburgh - How did the regear impact the assets yield?

A
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7
Q

Lease Regear, Edinburgh - what is the simple investment calculation?

A
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8
Q

Lease Regear, Edinburgh - what is a risk adjusted yield?

A

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9
Q

Lease Regear, Edinburgh - what was the yield shift you applied and how was it calculated?

A

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10
Q

Lease Regear, Edinburgh - what is Net Present Value?

A

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11
Q

Lease Regear, Edinburgh - Talk me through the lease regear at Edinburgh?

A

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12
Q

Stragic Report, London - what were the client’s business objectives?

A

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13
Q

Stragic Report, London - what were the client’s investment criteria?

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14
Q

Stragic Report, London - what were the client’s return targets?

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15
Q

Stragic Report, London - what did the market overview say?

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16
Q

Stragic Report, London - what key economic indicators impacted investment performance?

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17
Q

Stragic Report, London - how did you conduct the locational neighborhood analysis?

A

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18
Q

Stragic Report, London - What were the prime retail areas and how were these identified?

A

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19
Q

Stragic Report, London - what areas highlighted more oppertunistic returns?

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20
Q

Stragic Report, London - how did you source and evalaute the investment options from the agents?

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21
Q

Stragic Report, London -What was the outcome of the analysis?

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22
Q

Asset Optimisation, EPC Strategy - How did you gain understanding of your client’s organisation and strategy?

A

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23
Q

Asset Optimisation, EPC Strategy - What were the client’s ESG goals

A

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24
Q

Asset Optimisation, EPC Strategy - What did the RAG analysis show?

A

Red - non-compliant
Amber - compliant
Green - future compliant

25
Q

Asset Optimisation, EPC Strategy - How did the model estimate cost for EPC improvements?

A

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26
Q

Asset Optimisation, EPC Strategy - How did the model project the expected reduction in energy intensity?

A

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27
Q

Asset Optimisation, EPC Strategy - What was the outcome?

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28
Q

Turnkey Solution - Kensington - what was your client’s strategy?

A

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29
Q

Turnkey Solution - Kensington - What is Cat-A, Cat-A+ and Cat-B?

A

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30
Q

Turnkey Solution - Kensington - How did you estimate the improvement in ERV for different fit-out options?

A

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31
Q

Turnkey Solution - Kensington - How did you evaluate occupier demand?

A

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32
Q

Turnkey Solution - Kensington - Why are tenant’s demands shifting to fully fitted office spaces with smaller floor plates?

A

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33
Q

Turnkey Solution - Kensington - How did you workout the payback period to be 5 years?

A

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34
Q

How can real estate strategies improve business performance or generate financial savings?

A

Business performance can be improved by analysing their real estate portfolio, occupational costs, and development land. Strategies may include:
- Reduce their real estate portfolio to realise savings and improve efficiencies.
- Relocate to markets which command lower rents to reduce costs.
- Use virtual technology - automation / digitisation to reduce costs.
- Focus on sustainability / renewable energy to lower utility costs.
- Outsource some services e.g., IT to reduce costs.
- Develop greenfield or brownfield land to optimise their existing resources.
- Lease vacant premises (to a private individual, company, serviced operator etc.) to generate a rental income.

35
Q

How do long term versus short term real estate strategies differ?

A

Short term strategies may consider and evaluate the progress and challenges in the present and create an action plan to improve the performance and overcome challenges in the short term.

By contrast, long term strategies may assess a comprehensive framework that comprise business objectives / goals to be met within e.g., 5 years+.

Short and long term strategies may ultimately differ in scope and execution. Ideally, short term strategies tie into long term objectives, however short term goals are likely reactive to meet business needs. Additionally, the execution of short term strategies depend on current operations, whilst long term strategies are based on whether short term goals are met.

36
Q

What is benchmarking?

A

Benchmarking is a strategic management tool used by businesses to compare their processes, products, or services against industry comparables, standards, or best practices. This comparison provides valuable insights into areas of strength and weakness, guiding efforts to improve performance and maintain competitiveness in the market.

37
Q

How would you manage real estate to maximise benefits, enhance efficiency, and minimize costs

A

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38
Q

What is the role of a Strategic Real Estate consultant?

A
  • Help clients to be more strategic in their thinking and actions,; the consultant needs to understand the nature of the client organisation, i.e.:
  • Understanding the organisation’s strategic drivers
  • Relating these organisational drivers to real estate requirements (e.g. occupancy, investment)
  • Determining specific real estate requirements (e.g. space required, income and/or capital growth objectives)
  • Undertaking scenario modelling
    Scenario planning & implementation
  • This will involve having an appreciation of:
    o Relevant external and internal drivers (political, economic, socio-cultural,technological, legal and environmental (PESTLE analysis))
    o Whether clients are going through organisational change (e.g. growth/ contraction,takeover, relocation etc)
    o Where clients need to/should locate
39
Q

What is PESTLE?

A

Policitcal, Economic, Social, Technological, Legal and Environmental

40
Q

What information can you analyse to understand more about Client

A

Property information (assets. held/occupied, property portfolio profile in terms of location, asset classes, values, leases any valuations they may have had undertaken.

Finances (reviewing financial plans and annual reports, what they hold by way of assets and liabilities, cashflow and its impact upon meeting rental, obligationscash surplus and/or debt availability

How many people they have working for them and where they are

Key aspects of their marketplace or operating context

Their need for/reliance on technology

41
Q

Have you ever used scenario planning/analysis when advising client about their
realestate?

A

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42
Q

How did you convince your client that your advice offered the ‘best’ solution to meet
their needs?

A

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43
Q

What is WAULT?

A

The Weight Average Unexpired Lease Term

Calculated by (unexpired lease terms * annual rent / total rental income)

APC ASSESSMENT (18 decks)

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