In the investment landscape, the real estate investment trust is the instrument that enables heritage properties to become a financial asset by ensuring reasonable stability, income-generating capacity, portfolio diversification and tax optimization.
Investors and Asset Management Companies (AMCs) face complex challenges related to the valuation of these assets, risk management, and strategic planning, and require structured analyses that require the advice of the independent expert for real estate funds.
The role of the independent expert
The independent expert ensures transparency, objectivity, and independence along the complex process of real estate asset valuation, with respect to both the SGR and the quoters, as well as the responsibilities stipulated in the current regulations1.
Independent valuation of real estate assets is a process that involves the use of rigorous and standardized methodologies to ensure objectivity and consistency in valuations and to provide advice based on factual data and objective analysis.
To ensure super partes and reliable analyses, the independent expert should have no connection with the parties involved in the transactions, nor should he or she engage in intermediary activities. Objectivity and independence, in fact, are essential elements to mitigate the risks associated with potentially biased evaluations and reduce potential detrimental effects from conflicts of interest.
This level of ethics and integrity is crucial to maintaining investor confidence and ensuring the long-term sustainability of investments.
The work of the independent expert
Using an in-depth analysis of the real estate market, current and future trends, and economic, demographic, and industry-specific data for each asset class, the independent expert defines the valuation method and approaches to determine the market value of the property, taking into account the characteristics of the property, its uses, potential, and employment status.
All this information is then fully reported in the appraisal report.
How to choose the independent expert
Choosing an independent expert requires care and careful evaluation of several factors:
- Experience: a consulting firm with long experience in the industry has a deeper understanding of the market and its dynamics, and has a highly qualified team.
- References: references can provide an idea of the quality of the work done, especially in relation to the significance of the assets, both in terms of quantity (number of assets) and overall market value.
- Technical expertise: the use of internationally recognized methodologies ensures independent and accurate valuations, which are essential for determining the market value of real estate.
- Professional Certifications: professional certifications are an important indicator of an independent expert’s competence and credibility.
- Legal and regulatory expertise: recent financial laws have introduced new rules for real estate fund management, imposing stricter standards for asset valuation and risk management. Possessing specific expertise in this area allows you to avoid penalties and optimize investment strategies.
- Transparency and Communication: transparency and clarity in communication enable investors to make informed decisions based on reliable and understandable data, and to stay abreast of any changes in asset values or investment opportunities, adjusting their strategies accordingly.
Why choose an independent expert for real estate funds
We find ourselves in a volatile real estate economic environment, littered with constant regulatory changes and significant market fluctuations.
Choosing an independent expert for real estate funds is important for those who want to invest or manage investments profitably and responsibly, as it means having a figure with in-depth and objective knowledge who can identify hidden investment opportunities, minimize economic risks, and enhance the safety and reliability of the fund.
A third party validating investment decisions and strategies is, therefore, a strategic choice that can make the difference between the success and failure of real estate investments and strengthen confidence in the portfolio management process for those seeking a competitive advantage in the Real Estate market.
During the acquisition or disposal phases of real estate, thorough due diligence can also be provided, ensuring that investment decisions are informed and well thought out.
Working with an independent expert offers a combination of expert knowledge, impartiality, flexibility, and access to resources that can significantly improve the quality and performance of real estate investments.
PRAXI complies with the international standards set by IVS – International Valuation Standards – 2022 edition and RICS Valuation – Global Standards 2022 (“Red Book”).
