Risk & Rating
“Risk Rating” can be understood as the level of risk of an investment or asset. The aim of the rating process is to create an explicit opportunity and risk profile for an individual object or real estate bond, as well as complete portfolios, in an efficient manner, having taken the relevant markets into consideration.
The result is a detailed report, in which risks, strengths, weaknesses and potential for development are addressed. Classification and grading are achieved by means of a rating scale. This creates the possibility of a simple comparison. The conclusion of the rating is more accurate, the finer the differentiation of the individual grades.
The rating result is intended to create maximum transparency and clarity regarding the risk taken. For the investor, who in most cases is risk-averse, the rating result will help decide whether or not to make a particular investment with its ascertained risk and the corresponding interest rates.
The rating itself is done using qualitative and quantitative factors. The selection, assessment and their weighting is carried out by trained real estate experts. The factors can be subdivided into the following groups: object criteria, location, market and quality of cash flows. The assessment of these factors is based on complex combinations; however, the presentation of the results is easy to understand and grasp at a glance.
Areas of Application
- Rating of individual properties
- Supervision and rating of a portfolio
- Assistance with investment decisions
- Rating of real estate bonds, funds and loans
- Corporate rating in the real estate industry
- Internal Ratings Advanced Approach in accordance with Basel II and Basel III