Janis Ozols, Colliers Partner, Head of Valuation & Advisory, MRICS
Great ambitions in real estate valuation for corporate clients
Due to our strong appraisal team and Colliers' international network, we are already the first choice for many corporate clients and individuals when it comes to valuing commercial or developing real estate. To achieve this, we have assembled an experienced team of specialists, created the most technologically advanced work platform in the local market, implemented and use one of the world's leading cash flow modeling and analysis tools, ARGUS Enterprise, as well as ensure regular exchange of knowledge and experience with Latvian colleagues, as well as those in the Baltics and on a wider European scale. As a result, our service is distinguished by an easy-to-understand presentation, which demonstrates a nuanced understanding of the specific real estate object and market context, as well as allows you to track the appraiser's analysis, assumptions and conclusions. The involved experts are focused on professional, maximally open and supportive communication with the client and other involved parties, both during the evaluation process and after the submission of the final handover to the client.
Why choose an internationally recognised appraiser?
The core of the appraisal team consists of four certified real estate appraisers, each with more than 15 years of professional experience. In addition, two of the experts are members of the international organisation, RICS (Royal Institution of Chartered Surveyors), and registered assessors. Moreover, Colliers is currently the only valuation company in Latvia that has applied and qualified for the RICS monitoring mechanism—Firm Regulated by RICS. This status is an additional guarantee that provides the customer with:
1) Credibility - because a RICS-regulated company adheres to professional standards of practice overseen by an international organisation with more than 134,000 members in 150 countries around the world
2) Professionalism - the client can be sure that he will receive independent and knowledge-based advice from a qualified expert
3) Security - the client can be sure that the company with which he cooperates has an efficient and fair grievance procedure, has the opportunity to challenge the decision in an independent appellate, has insured professional liability of the consultant, which can cover possible losses of third parties
4) World-class quality - RICS members and company employees are constantly improving their knowledge and skills to provide customers with the highest quality service.
What is the added value of the valuation services?
On a daily basis, we are often faced with the reality that the importance of real estate appraisal is perceived only as a formality, without going into its content and without trying to add value to it in the decision-making process. At the same time, we see that clients with an international business scale and experience, as well as more and more local industry professionals, appreciate the benefits of a quality appraisal service. The valuation process, in most cases, is essentially an in-depth study of real estate, identifying its strengths and weaknesses, as well as opportunities and threats, taking into account market conditions, regulations, and contractual relationships. The valuer acts as an independent third party, providing his own interpretation of the findings. Consequently, the assessor must be able to formulate requests, ask the right questions, and sometimes persevere and able to justify the need for the requested information. The ability to present, explain, and defend one's point of view also characterises the professional evaluator who forms the core of the Colliers team.
Colliers valuation service is also unique in the sense that we are the only ones in the Baltics that have implemented and use probably the best available software—ARGUS Enterprise—for cash flow modeling and analysis of commercial objects on a daily basis. The use of such a professional tool allows you to go into detail and understand the income and expense structure of the object, adjust each cash flow component to the model, and is, therefore, an indispensable tool for working with complex investment property portfolios and reconstruction/development projects.
The undeniable advantage of Colliers' valuation department is access to market information, as our valuation, market research and consulting departments work closely together on a daily basis as a unified team. Colliers' significant market presence in office, commercial and industrial lease, as well as investment transactions provides access to information on current market processes—rental rates and other conditions, availability of vacant space, tenant demand trends, investment market rates of return and other relevant parameters. Consequently, judgments and assumptions in assessments rest on a strong analytical basis.
The technological tools available to us and the knowledge of our employees in this field in recent years have allowed us to implement a number of significant large-scale atypical evaluation projects. Experience and tools developed and used so far include the collection, processing, and analysis of big data, automated assessment tools based on machine learning technologies, as well as other technologically advanced solutions in the context of the local market. Therefore, Colliers is also open to these types of challenges, looking for such opportunities, and sees itself as a centre of excellence in the local market.
The experience of our appraisers covers the most important business and trade centres of Riga and the surrounding area, industrial and logistics objects, hotels, as well as various, incl. residential segment, development projects. Customers include recognisable names, such as Eastnine, EfTEN Capital, Hanner, Kapitel, Latvenergo, Linstow, LNK, Multi (Blackstone), Pillar, SG Capital, Zenith Family Office and many others. The valuations prepared by Colliers are accepted by all Latvian banks, and we are a reliable partner for foreign credit institutions that have customers and loan-providing real estate in Latvia. In 2020, the Colliers Baltic appraisal team participated in more than 620 real estate appraisal projects, with the total market value of appraised properties reaching 6.4 billion euros.
Potential of residential projects
Although the primary focus of the Colliers appraisal team is cash flow commercial properties, we also have significant expertise and experience in various housing projects. So far, they have been more apartment building development projects with the aim of selling individual homes. However, according to customer requests, market trends and, even more so after the recently adopted new regulatory framework for residential rentals, there is currently significant potential for the development of professional rental housing. Accordingly, we offer our competence in this segment, as well. If there are currently about 180 more or less professional long-term rental houses with about 5,000 apartments in Riga, then, according to the forecasts of the Real Estate Developers' Alliance, up to 100 million euros of investment per year could flow into this segment in the coming years. Colliers' market research and consulting team, whose new housing market analytical materials and market monitoring tools are used by major market players, provides significant support in this work.