Fees paid to the fund manager for its services for arranging debt for asset purchases or refinancing. This fee would be in addition to any arrangement fees paid directly to debt providers.
A loss of value caused by deterioration, or obsolescence, or both. Deterioration is evidenced by wear and tear and decay. Obsolescence is divisible into two parts; functional and economic. Functional obsolescence may be due to: poor planning, functional inadequacy or over-adequacy due to size, style, age or otherwise. It is evidenced by conditions within the property. Economic obsolescence is caused by changes external to the property such as property use (change in occupier habits or social).
The costs incurred from the commencement of a project to its implementation including, but not limited to, site preparation costs, preliminary costs, professional fees, earthworks and construction costs.
Proposed projects that are not committed but are likely to proceed.
Direct construction costs include:
Cost of Site:
– purchase price of land
– title, legal and recording expenses
– commission, if paid by purchaser
Cost of Improvements:
– preliminary: consultations, surveys or permits
– architects' and engineers' fees
– cost of building and equipment
– cost of improvements on land, such as landscaping, walls, fences, roads, grading
Investments held directly in real estate, as opposed to investing in property through a listed property trust. See also indirect property.
The interest rate used to convert future cash flows, both income and outgoings, to their present value, i.e. 'what it is worth today'. The term 'discount' does not refer to the meaning of the word, but the discounting of future cash flows by a particular rate of interest to determine the present value.
Financial modelling technique where a discounted cash flow is used to analyse an investment opportunity. Annual cash flows are discounted by a discount rate to arrive at a net present value (NPV) or internal rate of return (IRR) which are then used to consider the potential of the investment. Usually a 10 year period.
Investment portfolios managed by Fund Managers on behalf of individual investors and conforming to specific guidelines set by the investor. Usually the Fund Manager has the ability to buy and sell on behalf of the investors without referring to the investors for each transaction. The Discretionary Manager most operate within the investors guidelines. See also Non-discretionary Manager
The total cost of selling an asset. Includes the agents' commission, marketing/advertising costs, legal fees, valuation fees, and any other costs directly related to the disposal.
A plan offered by a fund allowing investors to reinvest their distributions for additional units.
Conventional industrial warehouse accommodation greater than 20,000 sqm in size. e.g. 85 William Angliss Drive, Laverton North, VIC.
A payment of cash from a company's profits to its investors. Income received by a managed fund from its portfolio is distributed to its unitholders as fund distributions.
Spreading of investments among different asset classes (e.g. office, retail, industrial) and locations in order to control and minimise risk.
A portfolio that invests in a mix of different types of assets. (e.g. office, retail and industrial).
The detailed research carried out prior to the acquisition of a property, management team or asset's individual characteristics, including leases and environments, etc. Includes research into the legal, tax and accounting terms and conditions of the deal to ensure their accuracy, completeness and soundness.
An auction where the auctioneer will commence proceedings by quoting a price above the actual value and gradually reduce the figure until a participant is willing to accept the auctioneer's price.