Altus Group rolled out its technology enabled valuation management services to Asia Pacific investors less than five years ago and has now expanded to handle the valuation management of assets worth $22 billion each quarter.
The company has reached this milestone by working with some of the largest investors in real estate assets globally, including Manulife Investment Management, which uses the service to help manage a portfolio of over 50 properties across eight countries in Asia Pacific.
With assets totalling more than 13 million square feet (1.2 million square metres), including office, industrial, logistics and multi-family properties as of the end of the first quarter of this year, Mingtiandi spoke with Kenneth Tsang, Senior Managing Director and Head of Real Estate Asset Management, Asia for Manulife Investment Management, together with his colleague, Joseph D Crescio, Global Head of Real Estate Valuations with the firm along with Rajinder Singh, Head of Advisory for APAC with Altus Group.
Together the three executives explained how using an online platform to manage valuations has enabled smoother collaboration, simplified reporting and provided new levels of portfolio insight.
Mingtiandi: What business challenges (or objectives) prompted you to extend independent valuation management services to your Asia-Pacific operations? What outcomes were you aiming to achieve?
Kenneth Tsang: As a global institution, Manulife’s real estate group has been exploring different value-added services to enhance the robustness of our valuation processes and our ability to capture key valuation data. Our company has adopted Altus Group’s independent valuation management services globally across Asia Pacific, North America and Europe since the fourth quarter of 2022.
The service provides us with a unified view by streamlining information sharing and reporting processes within one platform, through which we can comment, review and report on inputs from third party appraisers and asset managers.
The valuation management platform has also enabled more holistic decision making by consolidating various valuation-related parameters, visualising metrics and providing a broader, more integrated view of the portfolio. This makes valuation comparisons across different properties and sectors possible, which goes a long way in empowering users to make strategic decisions based on comprehensive information.
Mingtiandi: Has the adoption of the system helped to streamline your valuation process?
Joseph D Crescio: Yes, definitely. Investors expect transparency and independence, Altus Group’s valuation management services has brought an additional level of clarity and through our adoption of ARGUS ValueInsight platform, we are seeing a number of benefits around collaboration, reporting and data insights.
The platform enables collaboration by allowing seamless communication, task assignment, and progress tracking. This enables us to be more efficient in sharing data and discussing valuations both within our teams and among multiple stakeholders.
On the reporting side, using the valuation management system facilitates the process by setting reviewers at different phases and clearly logging comments from each phase reviewer.
Finally, the platform helps us to become more efficient and keep improving our processes by capturing valuation KPIs for analytics and reporting purposes.
Mingtiandi: For Raj, when we last spoke with Altus Group a few years ago, the company’s valuation management platform was still relatively new to Asia Pacific. How successful has this rollout been?
Raj Singh: Since we last discussed this in 2020, Altus has more than doubled APAC assets under valuation management for the platform to $22 billion a quarter. We did this by expanding our client base and establishing ourselves as the leading valuation management services provider in the region. The growth we have seen is recognition of the value-add that this service brings.
Mingtiandi: For our audience who have not yet used a system like this, how does Altus’ valuation management platform differ from the traditional approach to managing appraisals in the region? How does this system help valuation professionals to do their jobs more efficiently?
Raj Singh: Many real estate professionals get bogged down in valuation admin and lose sight of the most important thing – the asset. The traditional approach to the real estate valuation process is generally informal, lacking clearly documented expectations or an established schedule featuring regular communication and feedback opportunities. Unfortunately, this can lead to wasted time, missed deadlines and arguable valuations. It can also generate stress and conflict between asset managers and appraisers, which means performance, and work quality, suffers.
By standardizing your process, building collaboration into the workflow, using technology to automate processes, and involving a third party, commercial real estate funds can deliver valuations that are higher quality, take less time, mitigate financial risk, enhance scalability, and boost investor confidence.
We seamlessly manage the valuation process with ARGUS ValueInsight, our modern, web-based workflow and document management system. So, asset owners can streamline the vendor engagement and valuation review processes, automate workflow, simplify task management, and automatically extract valuation metrics for analytics and client reporting purposes.
Mingtiandi: How has this valuation management service been received by the industry in Asia Pacific?
Raj Singh: The industry in this region is now more aware of the genuine value proposition offered by having a qualified, reputable third party managing the end-to-end valuation process with the use of technology.
Investors expect transparency and independence with no conflicts of interest in connection with determining and reporting asset values – having an independently managed valuation process increases investor confidence.
This can be seen through the inroads that our team has made in providing our valuation management services to closed-end funds in Asia Pacific, which are seeing demand for greater valuation transparency.
Mingtiandi: How is applying this tech-enabled approach benefiting companies like Manulife and the broader industry?
Kenneth Tsang: Having a tech-enabled valuation management approach was a critical requirement for supporting our growing real estate investment footprint in Asia Pacific.
ARGUS ValueInsight offered a single solution platform to manage the end-to-end valuation process for our entire global real estate portfolio but also capture key valuation data metrics for analytics and reporting purposes.
Everyone wants to seize a strategic advantage by leveraging their internal data, including valuation data, to produce unique perspectives and gain new insights. And a tech-enabled valuation management partner can make this journey easier.
Mingtiandi: With higher interest rates influencing property valuations globally, is this adding fresh incentives for asset owners to streamline their valuation processes?
Raj Singh: Absolutely. Now, more than ever, the demand from investors for greater valuation transparency could not be higher. Both investors and auditors expect real estate investment funds to ensure robust processes that produce transparent, timely, reliable valuations reflecting current circumstances.
The strengths and weaknesses of existing valuation policies and processes must be considered. Those funds that don’t have robust valuation processes or governance could face the prospect of losing credibility with current and potential investors, and ultimately, the competitiveness of their offerings.
Having an independently managed valuation process can mitigate some of the risks and increase investor confidence.
Mingtiandi: Having achieved these milestones over the past few years, what does the Altus advisory and valuations team expect to achieve next?
Raj Singh: While we are still very much focused on continuing to grow assets under valuation management, accelerating the development of a proprietary pan-Asian valuation dataset, which will allow us to compare and benchmark assets, is a key strategic priority.
Having gained traction with the industry in the region, we expect to win broader acceptance as we continue to develop this dataset, which initially focuses on core and core-plus funds. The dataset will provide a set of comparative metrics across a range of key valuation indicators for the commercial real estate industry.
We are also excited by the forthcoming release of our internal Altus Performance Platform (APP) which powers Our Intelligence as a Service offer portfolio.
The APP will deliver a scalable, diverse, and extensible data model designed to support advanced analytics applications. The APP is where we house the most relevant industry asset data, apply that data for performance and risk management use cases, and derive insight and intelligence through advanced analytics. We will be transitioning our entire technology stack onto this platform.
This sponsored feature is provided by Altus Group. To find out more about Altus Group and valuation management services, visit the website.