Project valuation Adequate consideration of the development risks.
Many institutional investors today no longer restrict themselves solely to classic real estate and special-purpose properties; they are increasingly focusing their investment strategies on development properties. The financial objective of project development is the generation of development profit. However, the development risks are high. Additionally, due to the legal situation, there is always the danger that the community, the neighbour, the associations and other possible project opponents will create obstacles for the developer. This is further compounded by the marketing risk – with respect to both the lettable space and the investment property – and the realization risks that every construction client knows all too well, particularly with regard to quality, construction costs and deadlines.
Wüest Partner valuates your development property. To account for these risks in the valuations, we mainly use a risk rating in combination with the DCF valuation. The rating is used to derive the discount rate. The application of the rating is integrated in our valuation tools and thus very simple to use.