Aberdeen Property Investors has a structured investment process that has proved its value year after year. It has helped us exceed relevant external benchmark indices on investment returns by more than 1% on average in each of the last ten years. It is supported by a first class research capability and can be applied to all property markets and sectors. It combines the disciplines of Allocation, Selection and Management.
1. Allocation
We identify the sectors and markets where investments will meet agreed objectives. The analysis is first at macro level then at specific geographical and sector levels, capturing factors such as rental income, vacancies, yields and present and future construction activity. Our research-based forecasts of performance and risk apply data from external sources and from Aberdeen's extensive internal databases.
Finally, allocation analysis compares these market-level factors with asset-level information from the Selection process.
The Aberdeen Portfolio Optimiser is proprietary software that helps us establish a portfolio's ideal structure and produce a risk and return profile.
2. Selection
Our professionals use a range of systems to determine where the best properties are to be found in Allocation-defined markets and sectors: those properties that fit the fund's risk profile and time horizon and have the potential for added value by active Management.
Our hold/sell model helps identify which properties will generate better than average returns, based on return, risk market trends and property characteristics. In portfolios, every property is ranked by risk and return.
3. Management
The aim of active asset management is to maximise income returns. At property level this involves optimising lease contracts and operating costs and identifying opportunities to add value through refurbishment, development and repositioning. Good tenant relations and strong local presence are crucial.
Managing a property portfolio requires in addition efficient administration, accurate control of rents and costs, managing SPVs and local tax structures, and providing investors with high quality reporting.
