Valuation Management Catches on as APAC Real Estate Investors Adjust to 2020 Markets Sponsored Feature

An online platform that supports management of more than 8,000 commercial real estate assets worth over $650 billion has recently been upgraded to match the requirements of investors in Asia Pacific, and the company behind the service thinks it could help investors and fund managers seeking to navigate the twists and turns in this year’s markets.

Altus Group, a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry, recently rolled out DataExchange 3.0, the latest version of its integrated valuation management platform for commercial real estate. Introduced in recent weeks the system now includes functionalities for handling the standards and values required by market players in Asia Pacific, the UK and Europe, as well as in Altus’ home base in North America.

With the company having already inked deals with two of the world’s largest real estate asset managers to manage their valuations in APAC, Mingtiandi spoke with Altus Group senior executive vice president, Rick Kalvoda, who heads the firm’s advisory division globally, as well as to Raj Singh, who leads the business unit in APAC from Singapore. The advisory group executives explained about how this system that dominates the US market is already helping to streamline valuations in Asia Pacific.

Mingtiandi: Many investors in Asia Pacific are still managing their portfolios via teams of people sharing spreadsheet files. How can the latest version of DataExchange help them to work more efficiently?

Rick Kalvoda: DataExchange 3.0 brings the power of the North American market’s dominant valuation management platform to investors and fund managers in Asia Pacific. Specifically designed to efficiently manage valuation processes while mitigating risk through increased transparency, the platform centralises workflow and information exchange between the valuer and key stakeholders.

By bringing valuation information, including ARGUS files, into a single platform, property investors and managers can analyse and automatically generate reports at both the property and the portfolio level. Furthermore, as more users adopt DataExchange 3.0, investors will be able to benchmark their portfolio performance against local and regional markets, just like asset managers in the US.

Mingtiandi: In 2020, managing valuations has taken on a new level of urgency for most investors and fund managers in the region as the COVID-19 crisis roils markets. How can the latest version of the DataExchange platform help streamline the valuation process?

Rick Kalvoda: With the market uncertainty caused by COVID-19, there is now more demand than ever for transparent and independent valuation processes that follow best practices with standard valuation methodologies.

By streamlining information management and automating the reporting process, the platform allows investors to quickly see how market shifts impact the value of their portfolios.

Mingtiandi: How is Asia Pacific more ready for this service now than it was five years ago?

Raj Singh: Global institutional investors have been increasing their allocation of capital to the real estate sector in Asia Pacific, and non-listed real estate funds are now the most popular route for investing in the region.

And this trend is likely to continue growing. A survey this year by ANREV and its global partners showed that 77.5 percent of institutional investors globally expect to increase their allocations to Asia Pacific over the next two years – up from just 56.7 percent in 2019.

As these international players integrate Asia Pacific into their strategies, they carry the expectation that they will be able to use the same efficiency-boosting systems here that have become the standard in their home markets.

So, with the world’s largest fund managers asking their partners to work with them on a more streamlined platform, there is some new impetus for innovation.

Mingtiandi: Valuation management has caught on with major fund managers and investors in the US and the UK as a way to enhance the transparency within their valuation process. Is this service being adopted by more companies in Asia Pacific?

Raj Singh: Absolutely. Since our Advisory division established its presence in Asia Pacific about 18 months ago, we have gained rapid momentum and we currently provide quarterly reviews of valuations of properties in the region which carry a combined asset value of over US$9 billion – and that client list is growing.

We are already providing valuation management services for two of the largest asset managers in the world for their core open-ended funds in Asia Pacific, and we see being able to kick-start our business in the region with two of the biggest names globally as recognition of our service offering and the value-add that it brings.

Mingtiandi: What makes clients seek out a valuation management service?

Raj Singh: The primary reason that investors turn to a valuation management service is to allow their asset management teams to focus on their core task of “creating” value rather than spending countless hours on “determining” value.

In addition to this saving in terms of cost and management time, asset managers and operators are able show their investors that their valuation process is independent and follows best practices.

There’s also further value-add from the data that our team extracts and validates from the valuations, which investors can then use to analyse their own portfolios, as well as setting up valuation benchmarking in markets where there are enough properties to anonymize a data set.

Mingtiandi: Many people think of Altus Group as a software group that is mostly known for its global ARGUS asset and investment management platform. How does the advisory group fit into a tech firm?

Rick Kalvoda: Altus Group is a services, data, and software company because clients are more and more looking for something beyond just a software program or just a set of data. Our clients are looking for a “global” solution – they need a managed service solution that delivers expert services using software and data so that they can more easily achieve better insights into their portfolios.

Mingtiandi: Your team set up in Singapore two years ago. What comes next for the advisory group in Asia Pacific?

Raj Singh:  The aim of our Advisory division is to provide technology-enabled expert services to drive client value. Now that we have received a mandate from two of the world’s largest asset managers to manage their valuations in the region, we anticipate growing our Asia Pacific team as we take on more clients in the region.

We see this all as a natural progression of establishing Altus Group’s Advisory practice as the leading valuation management provider in the region, as we have become in the US and Europe.

This sponsored feature was provided by Altus Group. If you would to find out more about the Atlus Group Advisory services across Asia Pacific, please click here.