One the aspects of commercial property which I particularly like is the analytical nature of the investment. Criteria such as population density, population growth, recorded foot traffic and proximity to services are all influential in a commercial property purchase. On the other hand, taking the emotion out of the equation does not mean we are not passionate about these properties, nor the basis upon which we choose them for investment.
When selecting assets for our managed investments, all our acquisitions decisions are based on our unique investment philosophy, selection criteria and rigorous due diligence. This allows us to have confidence in offering quality investments to our clients.
This article discusses how our investment philosophy allows us to craft our unique set of acquisition criteria, within the framework of commercial property.
All investment activities carry a certain level of risk. In commercial property, you can, however, reduce the level of risk by ensuring that acquisitions are well-considered and that every aspect of the opportunity has been diligently considered and risk measured.
We develop our investment philosophy by defining our clients’ core goals, beliefs, risk tolerance, time horizon and expectations. We then use this philosophy as the basis for creating a stringent set of acquisition criteria. Great investment acquisitions then become a simple, sequential process we can easily follow to address the investment criteria.
We establish benchmarks, then measure all proposed acquisitions against them. Are they compliant or satisfactorily differentiated from our criteria?
Strictly enforcing our acquisition criteria allows us to have confidence in our investment decisions, as they will all be based on well-considered fundamentals.
The following flow chart outlines the basics of such an acquisition process. Over the years, Natgen has applied this process to hundreds of successful commercial property acquisitions.
While we have proceeded with the majority of the acquisitions we select, a number of assessments have not progressed. In most cases, this was based on material we uncovered during due diligence.
The value of this process can be best seen in the times when we have not proceeded. This is true, active risk management in effect.
Past experience strengthens our resolve to base all acquisition processes on our investment philosophy and to continue to set stringent asset selection criteria. Following this with targeted, comprehensive due diligence leads to quality investment decisions.
Natgen exists to provide our clients with well-considered risk-managed investment opportunities and quality corporate advice. If you are interested in getting advice about investment strategy, get in touch.