CorVal employs a disciplined approach to real estate investing that is based on understanding and evaluating investment risk through a detailed knowledge of the markets and an understanding of the property fundamentals that drive long term value.
Each investment is assessed from a micro perspective with a focus on the specific property attributes and the local market supply and demand conditions, as well as a macro perspective, considering the economic environment, including interest rates, inflation and capital flows.
CorVal considers property to be an inefficient asset class that offers astute investors the opportunity to benefit from pricing arbitrages by taking advantage of superior local information and knowledge. CorVal also understands the property cycle, which it seeks to take advantage of by buying assets well, implementing a clearly defined asset strategy to add value and then selling the assets so as to maximise investment returns.
CorVal has established relationships across the property sector with owners, agents and advisers, which enables it to see most property opportunities – both on and off market. CorVal also benefits from its relationship with its major shareholder, RF Capital, which is a well-capitalised family investment office that sees a variety of property opportunities across the debt/equity spectrum.
In assessing investment opportunities, CorVal:
- Evaluates the fundamentals that drive value, including entry price per sqm, initial and reversionary yields, property specifics (eg. size of floor plates, natural light, ease of sub division, access, NABERS, lease profile, etc) and the sale price per sqm required to generate the targeted returns. Even when CorVal views some of the property specifics to be unfavourable, it will still consider these assets if there is an opportunity to add value through active asset management.
- Seeks to understand each investment in light of the prevailing macro-economic conditions and from a micro perspective, focusing on the attributes of the property and the fundamentals of its sub-market.
- Defines the exit strategy for each investment during the acquisition phase, which is constantly monitored throughout the investment period and amended where necessary to ensure that the asset is sold at the time that is considered to optimise investor returns.