CBRE was first instructed by ICD Brookfield Place Limited before excavation began for the cavernous basement. The landmark scheme is now a LEED Platinum Certified, Grade A Commercial Building located in the Northern Precinct of Dubai International Financial Centre (DIFC), providing over a million sq. ft of leasable area across ground, podium and a total of 53 floors. That basement now provides 2,700 parking spaces and is seven storeys deep!
CHALLENGE
The Property offers unarguably the highest specification office accommodation in the DIFC and potentially the region. This presented a unique challenge in forecasting appropriate rental levels for the Property while still a development site and with no pre-leases signed. In addition to this, further challenges presented in terms of determining appropriate occupancy levels, lease-up timeline and void periods.
In order to tackle the challenges, CBRE undertook following:
• Assign a senior team member and sub-market specialist as a single point of contact for the client and to oversee the project;
• Detailed analysis of passing and asking rents, incentives offered, and lese terms for competing schemes;
• Primary research canvassing potential occupiers regarding interest levels and premium payable for an upgrade in specification and amenity;
• Analysis of in-house proprietary data regarding active space requirements for CBRE’s local and international corporate client base.
HOW CBRE CREATED ADVANTAGE
Relying on our superior market knowledge of this asset class and the ability to leverage both the CBRE extensive network of agents and proprietary data, we were able to provide a fully justified and validated forecast of future income and current day value.
A realistic approach to valuation from day one cemented CBRE as a trusted advisor to ICD Brookfield Place and its financiers during the four-year construction period and onwards into operations.
UAE
ICD Brookfield Place
UAE
Sakany by Dubai South
BACKGROUND
CBRE was tasked with providing a market value for under construction and operational assets at the date of valuation, for secured lending purposes. Dubai South set out to create a low-cost and high quality living environment to support the growth of the wider master-planned area surrounding Dubai World Central airport and the Expo 2020 site.
CHALLENGE
The Property consists 22 staff accommodation buildings, dining hall, retail and associated leisure amenities, that on completion will accommodate 15,000 residents. Sakany by Dubai South represents a step-change in the provision of staff accommodation facilities and in the context of existing stock, Sakany proved challenging to value. Superior efficiency and amenity provision bucked the trend of existing benchmarks and KPIs for this asset class.
In order to tackle the challenges, CBRE undertook the following:
• Assign a market specialist as a single point of contact for the client and to oversee the project; • Detailed analysis of passing and asking rents, and incentives offered by competing schemes to
supplement the datapoints presented by the Sakany rent roll;
• Thorough inspection to understand the accommodation and amenity provision;
• Canvassing the extensive CBRE database of investors to determine appetite for the asset class and required rates of return.
HOW CBRE CREATED ADVANTAGE
Relying on our market leading expertise, CBRE created advantage by:
• Using specialised asset data points to provide detailed analysis of competing operational assets in the local market;
• Consulting investors and asset owners to determine and validate required rates of return, leading to increased valuation accuracy.
CBRE was mandated to provide the market valuation of a portfolio of ready-made real estate assets which were under construction, for the purpose of financial reporting. The portfolio consists of 19 retail assets, plus three commercial centers which were under construction, spread out across various cities of the Kingdom of Saudi Arabia.
CHALLENGE
The main challenge of this project was the ability to collect reliable market evidence in the different cities and analyse the specific retail sector in each of the cities concerned.
In order to arrive at the real estate market value, we adopted the residual valuation method. In order to arrive at the total development value of properties under development, we used the investment method for evaluating the operating centers.
As well as determining construction costs and knowing the future operating costs of the assets under construction
To meet the challenges, we:
• Provided a detailed analysis of supply and demand, including insights of the most important factors that attracts tenants and customers from visitors to commercial centers. Plus the incentives offered by the management of each property, and compare them with similar properties in the surrounding area and market.
• Accurately inspect each property and review the information provided by the customer.
• Review our extensive database of investors to determine the desirability of using the asset class and the required rates of return.
HOW CBRE CREATED ADVANTAGE
Our global market-leading experience created an advantage through:
• Our market leading data from similar previous projects, as well as CBRE’s experience in other
service lines, such as Project Management.
• Use specialized asset data points to provide detailed analysis of the competing operational assets in the local market. Consulting with investors and asset owners to determine and verify the required rates of return, which increases the accuracy of the evaluation. Discussions with locally active brokers to gather reliable market information as on the valuation date.
KSA
Arabia Centres
CBRE was given the mandate to provide the market value of a vacant plot of approximately 1.4 million square meters of land in Madinah, for the purpose of internal management.
CHALLENGE
The main challenge faced during this assessment was the ability to collect transactional evidence for plots of comparable size to the property. Since there were no previous dealings of similar properties in the Medina market, we relied on comparable evidence for smaller plots of land for sale in the market and applied the required adjustments, including negotiation rebates and quantitative rebates to reflect the difference in volumes between evidence collected and the size of the property. In order to arrive at the real estate market value, we adopted the residual valuation method and to arrive at the total development value, we used the comparison method.
• Provided a detailed analysis of supply and demand, and incentives offered by competing schemes to supplement data points provided by the customer.
• Accurately inspected the property to review the information provided by the client.
• Studied the factors affecting the future of the city’s real estate market and conclude the appropriate time for development, sale, and best use.
HOW CBRE CREATED ADVANTAGE
Relying on our market-leading experience, we created an advantage through:
• Use of our extensive database; experience of previous projects in the city; understanding the best use of the land; the expected time to sell the entire land, and the development costs.
• Discussions with locally active brokers to gather reliable market information as on the valuation date.
• Internal discussion with other departments in the company and the benefits of their experiences in understanding the term and method of marketing the land and identifying target customers • Knowing the costs of developing the infrastructure of the land and the period required to extract
all the important licenses and permits that enter into the calculation of the time sufficient to complete the project.