Finance, Real Estate and Wealth-being by Scardovi Claudio;

Author:Scardovi, Claudio;
Language: eng
Format: epub
Publisher: EGEA Spa - Bocconi University Press

Figure 5.3 Real estate analysis on state of conservation: KPIs, rationale and data sources

Of course, there are many other, more traditional, variables to consider in order to gauge the ease of access and fungibility of a given property, including the presence of a bus stop or metro station nearby, its vicinity to a highway or airport and so on. This supporting infrastructure could also change and develop, but it takes money and time for this to happen. Additional changes in competitive factors should also be considered – for example, a change in income taxation for residents and corporations, or in value added tax, all of which impact on consumption; these will occur discontinuously. Other factors that are also related to infrastructure and consumption can be monitored in real time, and will likely show almost continuous changes. For example, the quality of tarmac on nearby roads and access routes also helps to determine the attractiveness of the place, as does the availability of good parking facilities (at affordable prices) in the vicinity. The presence of a successful new flagship store is also relevant, as is the presence of street-facing shops up for rent that have been empty for months. New developments designed by a star architect, and sold out in a few weeks, similarly provide a relevant indicator, as does the presence of undeveloped old buildings, unrefurbished houses and unfinished (failed) developments. These all have very positive or negative effects on the value of other assets, driving the overall perception of the area either as “cool” or a ghetto, to be avoided at all costs. Clearly, it would be unwise to buy a perfectly refurbished Victorian house surrounded by derelict warehouses between dilapidated condominiums. Even if the property has been beautifully restructured, refurbished and redeveloped, the surrounding buildings and trends in the area would matter a lot – influencing our gut feelings about whether an area is being gentrified, fast forwarding to a bright future, or whether it is sinking into disrepair and total neglect.

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