Applying advanced property analytics to portfolio optimisation

We are living in challenging times. The impact of the COVID-19 outbreak -and the measures to contain it- is global and is being felt across industries. According to the IMF, in its June 2020 World Economic Outlook Update, global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 WEO forecast.

At an industry-specific level, the Real Estate Global Market Report 2020-30: COVID-19 Impact and Recovery from Research and Markets, highlights that due to the economic slowdown, the global real estate market is expected to grow from $2673.1 billion in 2019 to $2696.7 billion in 2020 at a compound annual growth rate (CAGR) of only 0.9%.

With an increased pressure on real estate portfolio managers to drive exceptional performance, identifying both, potential loss drivers and profitability maximisation opportunities become critical.

The need to pivot fast to respond to the crisis and lay the groundwork for the next phase renders portfolio optimisation solutions more relevant than ever.

Objective architectural quality assessment

The first step towards portfolio optimisation is conducting an objective and thorough analysis of the sites and units it contains.

Until Archilyse brought their objective and automated architectural quality analysis into the real estate market, the architectural quality assessment of real estate units was done manually, on-site and based on the subjective experience of real estate agents.

With the floor plans of the units and their geolocation data as input, Archilyse automates the architectural quality assessment and produces objective indicators such as sunlighting, noise levels, views and many other floor plan related quality parameters.

Archilyse converts the 2D floor plans into 3D models which are the basis for the analysis. Following the conversion, the system simulates and calculates over 100 different quality criteria and produces the most comprehensive architecture quality data set available today.

 

View simulations generated by Archilyse

View simulations generated by Archilyse

Based on this analysis, the units contained in a portfolio can be indexed, ranked and clustered according to their performance with respect to the evaluated performance indicators.

Such a qualitative architectural floor plan analysis significantly increases e.g. the accuracy of real estate price estimates.

Optimised pricing

Setting the right rental price is key to maximising portfolio profitability.

The advanced property analytics extracted in the previous step can be used to support and enrich valuation models. When used in combination with historical real estate market data, it allows defining market-validated prices even for new developments.

One of the options to achieve such optimised pricing is using the RentCalibrator, a solution developed jointly by Archilyse and PriceHubble. It inputs the values generated by Archilyse and contextualises them with the broad real estate market data and valuation models provided by PriceHubble. As a result, it benchmarks the performance of the units and outputs optimised price recommendations.

 

Rent calibrator real estate pricing tool_Archilyse

Optimised price recommendations

The solution allows for automatically identifying over and underpriced units.

As overpriced units pose a high risk of long vacancy periods and high tenant fluctuation and underpriced units offer revenue maximisation opportunities, the RentCalibrator plays a key role in maximising portfolio profitability.

With your expertise and our solution, you can take portfolio optimisation to the next level.

Key benefits

  • Set market-validated prices
  • Optimise your price determination process
  • Reduce vacancies and tenant fluctuation
  • Steer time on market
  • Identify hidden revenue potential in your portfolio
  • Avoid unnecessary visits, evaluate objects from anywhere

Interested in learning more?

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