Our Investment Process
Each real estate transaction is unique but Folkestone’s investment process follows a disciplined process to minimise risk while maximising returns to our clients.
- Research – strategic research is the core of our investment strategy. We add our own internal research with publicly available information to develop investment strategies to take advantage of the market and invest at appropriate stages of the cycle.
- Asset Selection – through our extensive real estate experience, we have developed far-reaching networks of contacts and sources of investment opportunities. We believe these relationships enable us to source acquisitions “off-market” or with limited competition. This will provide a sound basis to achieve attractive risk adjusted returns.
- Due Diligence – we are fundamentally a risk focused, value drive investor, emphasising preservation of capital, downside protection and growing cash flow. We conduct a review of relevant information to identify material risks and validate assumptions in the financial analysis. Rigorous analysis on the asset is undertaken prior to acquisition to identify opportunities for value creation, to mitigate risk and assess the impact of the planned acquisition on the existing portfolio metrics. Consultants will be engaged as appropriate to review key risks including legal, tax, accounting, real estate valuation, insurance, environmental and relevant technical matters.
- Asset Plans – each investment has a strategic asset plan. The plan clearly articulates the objectives of the investment including the financial performance of the asset, the leasing strategy, and opportunities for repositioning, refurbishment or redevelopment to ensure that the asset maintains its competitive position and efficiency of operation.
- Asset and Development Management – we seek value enhancement through active management of our investments ensuring they are operated on the most efficient basis, have an appropriate tenant mix with the goal of maximising rental revenue and managing risk exposure to individual tenants, and refurbishing or re-positioning, where appropriate, to improve rental growth prospects and capital value. In the case of developments, we actively manage the development process to maximise revenue and minimise development delays and cost overruns.
- Exit Strategy – being a disciplined seller is as important as being a disciplined buyer. We identify exit options prior to acquisition. We regularly review the performance of each asset against its asset plan, the stated investment strategies and the exit strategy, to ensure we can optimise the returns upon the sale each asset.