Exit Factors

The exit factors may be summarised as follows:

  • Strategy
    • Expiry of the original holding period
    • Changed exogenous or endogenous circumstances
    • Other acquisition or consolidation options
  • Individual property appeal or portfolio appeal
    • Change of investor strategy in general
    • Change of property appeal or portfolio appeal
    • Tenant situation
    • Vacancy rate situation
    • Reduction of the holding period
  • Property market cycle
    • Supply and demand situation
    • Property price trends
    • Rent trends
  • Physical property cycle
    • Maintenance backlog
    • Renovation / repair
    • Imminent re-letting
    • Investment requirements with a view to extending the holding period
  • Financial property cycle
    • End of a financing cycle
    • Change in the interest rate trend
    • Change in exchange rates for foreign currency mortgages
  • Changes to the law
    • Legal certainty of property ownership
    • Tax law
      • Abolition or reduction of land taxes (e.g. capital gains tax on property)
      • Change to tax systems
  • Transaction aspects
    • Costs
      • e.g. IPO
      • e.g. property securitisation
      • e.g. public to private
    • Time involved
    • Commitment of management capacities

Depending on the portfolio, it may be necessary to create property categories, i.e. a “holding” segment and a “sale” trading option segment.

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