Real Estate Credit Rating

The categorization between A to C is based on the valuation of the data of the property and the market in which it is located, to identify its potential to meet its investment objectives.

Each tier corresponds to the amount of risk in order to determine the investment premium, known as the spread, which basically limits the range of required return.The categorization is general by category / type and geographical location of areas and does not replace the assessment / investment study of a specific property.

The basis of our study has been based on the standards and criteria of the international rating agencies Moody's, Standard and Poor's, Fitch and others, but has been adapted to the rules and data of the real estate market and the particularities of each country. Our categorization is renewed in corresponding time intervals.

At the same philosophy, the Credit Rating Real Estate, is aiming to present the expectations of any property investment and its ability to meet up the goals based on the economy market data and at the same time to investigate the influence it has from the economical environment in which it is located.

The gradations are the same from AAA which is the top of the scale to the bottom which is C. For each category, there is the possibility to add subcategories, by using positive or negative deviations (-, +). However, this is an additional tool that serves the predisposition (positive or negative) of the market. In the Real Estate Market, we don't find the need to use -/+ so often, but we will make an exception and mention the BBB level - as our country is also included in it.

Factors affecting Investment Grade :

• The economic and political environment of the country where the property is located (political stability, unemployment rate, inflation, GDP growth, etc.)

• The market data related to the type of real estate

  • For retail stores, the increase/decrease in consumption turnover, market trends as well as the consumption potential of citizens are taken into account

  • For Buildings / office spaces, priority in the evaluation algorithm is the development of the Country and its reflection in the unemployment rate

  • For Residences, the demand for real estate rentals and purchases as well as financing costs play a primary role

• The gradation of real estate investments is the law of supply and demand, therefore it could not have a relative place in this equation

• Expected changes in urban planning and taxation

• Details of the historical route of the property (in terms of use, recognition, type of property, etc.)

• Details of competitive offer (substitute)

• Data/forecasts of future fluctuations in real estate supply

• Cost of construction

• Anticipated changes in real estate taxation

• Expected changes in the urban planning regime

• Infrastructure projects in the area that will improve living conditions, traffic and by extension the demand for real estate

• Projects that are delayed in completion or not started and adversely affect an area

• Mythology for planning a change of character of an area (for example, changes in the urban planning of a municipality/region, installation of Sanitary Landfills Waste, etc.)