Property report

Disclose the nature and frequency of property valuations, explaining how they reflect the expectations of investors and ongoing business needs of the vehicle (refer to PV15 of the Property Valuation module).

Describe the procedures and internal controls put in place to appoint external valuers and oversee the valuation process to ensure it is objective and free from any bias and not influenced by potential conflicts of interest.

At a minimum, disclose:

• The valuation standards (such as RICS), methodologies and frameworks used in arriving at an opinion of value;
• The identity and compensation of the external valuer and confirmation that fees are not linked to the outcome of the valuation;
• Backtesting procedures for valuation (eg number of valuation reports backtested out of the total asset portfolio);
• Number of years of collaboration with the external valuers and results of the last appointment review process;

Summarise and comment on the current property valuation methods and outcomes.. Include information on the methodologies used and the key market inputs and assumptions such as yields, discount or capitalisation rates. Describe any specific or special assumptions used in the property valuations such as assumed disposal scenarios, assumed capital expenditure and the treatment of transfer taxes.

At a minimum disclose (refer to PV21):

• Information relevant to the approach taken across portfolios with different asset types and potentially different valuation methodologies;
• Disclosures of market assumptions and their related explanations. The information regarding applicable market assumptions could, for example, include sensitivity analysis of rent movements and yield changes;
• Disclosure of any limitations or reservations made by the external valuer in the valuation report;
• Disclosure of significant issues related to valuation outcomes, eg covenant breaches and liquidity issues;
• Disclosure and explanation of deviations from the underlying appraised value, either related to vehicle-specific circumstances or disagreements with the external valuer (refer to PV22 and PV23);
• Disclosure of sustainability factors that have been taken into account when arriving at valuation outcomes;
• In the event of significant changes in market value resulting from a rotation of the external valuer, the investment manager must perform an assessment of the main underlying assumptions and provide full disclosure of the rationale for such changes; and,
• Disclose any disagreements between the investment manager and the valuer on the underlying market value of certain individual assets, including deviation from the market value.

SDDS references:
1.17 RICS Rules Compliant, 9.1 Total Fair Value of Investment & Development Portfolio, 9.2 Fair Value of Investment Portfolio, 9.3 NOI Yield and 9.5 Gross Leasable Area

Annual

Interim

Describe material changes

Disclose the proportion of the property portfolio which has been subject to an independent external valuation along with references to the name and qualifications of the valuers, and the date of such valuations. Include details of any modifications or reservations disclosed in the valuers’ reports.

See also RG14. Disclose the qualifications of the members of the governing body of the vehicle, who oversee the valuation process (refer to PV11 of the Property Valuation module).
 

SDDS references:
3.5. % of Real Estate Assets Valued during the Reporting Period, Externally and 3.6. % of Real Estate Assets Valued during the Reporting Period, Internally

Annual

Comment on the development of rental growth and expected rental values by sector/geography. The market data provided should be relevant to the specific activities of the vehicle.

Annual

Interim

Describe material changes

Discuss the development of property yields, including yields by sector and geography.

SDDS references:
9.3 NOI Yield

Annual

Interim

Describe material changes

In exceptional circumstances, deviations by investment managers from property valuations as determined by external property valuers should be clearly explained and disclosed.

If there is a disagreement between the investment manager and the property valuer on the market value parameters, these parameters must be clearly explained and disclosed.

See more details at PV23 of the Property Valuation module.

Whatever the circumstances, appropriate internal procedures (including escalation measures) should be followed by the management in the event of valuation adjustments.

Annual

Interim