Purpose
The RES Forecasting Model projects total return, capital growth, rental growth, and yield change estimates for 64 categories of the UK real estate market, allowing users to design economic scenarios and analyse their effects on market returns. Each quarter, Oxford Economics projections and the MSCI Quarterly Index are used to pre-populate the model. This service is fully supported by an econometrician and analyst. Please note, you need to subscribe to MSCI Global Intel to use this service.
Solution
- A customisable commercial property forecast
- Transparent econometric equations translate economic scenarios into projections for rental growth and yields.
- A cash flow engine simulates future net income receivable and capital values taking into account the timing of lease expiries, reversionary potential, over-renting, rent reviews, fixed uplifts and the letting of vacant units.
- The net income receivable and capital values are used to build all of the MSCI standard market performance measures.
- Deductions are made from income for letting costs, rent reviews fees and lease renewal fees and from capital returns for refurbishment costs/maintenance.
Features
- Replication of the structure of the MSCI Databank.
- MSCI market performance.
- Key economic data.
- MSCI / Strutt & Parker Lease Events Review data for average propensity to renew, average propensity to break and letting periods.
- Economic forecasts from Oxford Economics.
- RES econometric models of future rental growth and yield movements
- Total return, income return, capital growth.
- Rental value growth.
- Equivalent and initial yields.
- Vacancy rates, reversionary potential, net income growth.
- 8 property types: unit shops, supermarkets, shopping centres, retail warehouses, standard offices, office parks, standard industrials, distribution warehouses
- Shopping centres broken down out-of-town and in-town
- Retail warehouses broken down into fashion parks, retail parks and solus units
- Economic Regions: City2, West End2, Mid-town2, Inner London2, Rest of London12, Central London12,
- All London1245, South East12345, Eastern124, South West124, East Midlands124, West Midlands124, North West124, Yorkshire & Humberside124, North East124, Scotland124, Wales124
Key: 1 standard retail, 2 standard offices, 3 office parks, 4 standard industrials, 5 distribution warehouses
- Updated quarterly with the latest MSCI Quarterly Index and Oxford Economics forecasts
- Fully supported by econometrician and analyst
Benefits
A faithful replication of the MSCI methodology for calculating market performance and income and occupancy characteristics producing a forward-looking consistent set of measures to the MSCI Digests.
Full accompanying descriptive measures are provided for initial yields, net income growth, vacancy rate and reversionary potential.
Build your own House View
Create your own scenarios for the economy and produce a revised forecast for the property market at the click of a button
Ability to directly over-ride the rental growth or yield forecasts
Ability to amend the demand or supply response for any segment of the market to customise your forecasts
- No need to constantly update your model data through the year: Model is fully updated each quarter with the latest MSCI Index results
- No need to re-estimate year-to-date results through the year: Model outputs for calendar year, year to-date, 12 month outputs or any time period on an annualised or percentage basis
- No need to recreate performance calculations in Excel: All industry performance metrics have been hard coded into the model
- Streamline your House View meetings
- Create your own economic scenarios and compare immediately to the base forecast
- Use your own rent and yield expectations to generate associated market return measures