Foreword
Sixty years of history have enabled Aspiag Service to gain a great deal of experience in the large-scale retail sector, putting the customer at the center, focusing on innovation, and providing quality and local products. Today the company’s mission is increasingly focused on sustainable growth, combining business objectives with social and environmental goals, working daily to develop new methodologies and procedures to minimize environmental impact and operate with respect for the safety of employees, customers and all stakeholders.
For many years, PRAXI has been assisting Aspiag Service, as a trusted partner, in Real Estate consulting activities. In this case, Aspiag Service engaged PRAXI to carry out the estimation of the Market Value of 18 assets held by the Company, aimed at satisfying requirements of compliance with international accounting standards of the values recorded in the financial statements (Impairment Test).
Project
The estimation involved No. 18 supermarkets and hypermarkets of various square footage, distributed throughout the Triveneto region, some of them located within shopping centers.
The process consisted of the following steps:
Documentary collection and analysis carried out on information of various kinds such as cadastral plans, invoices, IMU, rent roll (consistencies, summary of contracts and main clauses and limitations), interventions for ordinary and extraordinary property maintenance.
Direct inspection to frame the context, as well as the features, level of finishes, and plant equipment of the properties.
Appraisal development and report writing: based on PRAXI’s appraisal models, the approach used to estimate the Market Value of the assets was to discount the cash flows generated from existing and/or prospective leases and sale proceeds, net of costs attributable to ownership.
Outstanding rents were inferred from the documentation collected (rent roll), while prospective rents were estimated from a market survey aimed at determining average unit parameters (€/sqm/year) and subsequently calibrated according to the specific peculiarities of the property (location, surrounding context, structural and equipment quality, accessibility and parking facilities, level of competition, extent of turnover in relation to the size cut/authorized sales area). The Market Value was then estimated by discounting the cash flow with a rate calculated according to the characteristic risks of the property under consideration.
In addition to the scale of the intervention, because of the amount of assets involved, the most challenging aspects of the project were:
- The assessment of the life cycle of the properties and their maintenance level according to what was found during the inspection and the preliminary investment analysis
- The architectural, plant and environmental assessment of buildings
- an appreciation of the potential catchment area and competitors
present in the immediate vicinity of each supermarket being estimated (level of competition).
Results
The activities carried out resulted in the return to the Client of a comprehensive appraisal report consisting of:
- An executive summary, setting out the object of estimation, the purpose and the estimative criteria adopted
- 18 descriptive reports, one per property, with the main identifying data for each one: location, cadastral data, floor plans, descriptions of the building and facilities present, photos, and appraisal process.
The appraisal allowed Aspiag Service to update the values recorded in the financial statements of the properties subject to appraisal, guaranteeing the Company’s transparency and alignment with the main accounting criteria internationally recognized today. The appraisal has enabled Aspiag Service to update the book values of the properties under appraisal, guaranteeing the Company’s transparency and alignment with the main internationally recognized accounting criteria.
Future
The well-established relationship of mutual esteem and trust that has developed over time, together with the sharing of high quality standards, has ensured prompt assistance to Aspiag Service where and when needed, enabling new opportunities for collaboration, such as the estimation of the Market Value of building areas/transformable real estate and supermarkets for the purpose of possible purchases and sales.
to Aspiag Service where and when needed, allowing for new opportunities for collaboration, such as estimating the Market Value of building areas/transformable real estate and supermarkets for the purpose of eventual purchases and sales.
