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Case study: On what rests the quality of real estate appraisals?

Annual appraisals for financial reporting purposes and ongoing acquisition advice

Challenge

Warteck Invest AG is one of the oldest real estate holding companies in Switzerland and manages an attractive portfolio of income properties – at present, close to 40 buildings with a collective market value of roughly 500 million francs.

High quality, precision and best practice

For Warteck Invest, real estate appraisals represent one of the most important success factors. That’s why they entrusted PwC the assignment. The challenge in this regard is multifaceted: for one, the results have to be extremely accurate and as reflective of the market as possible. Secondly, stringent best practice requirements are placed on the valuation method applied. And lastly, PwC should provide timely information on the effects of changes to accounting standards.

Ever since Warteck Invest became listed in the real estate segment of SIX Swiss Exchange, PwC has been supporting the company in various fields of real estate evaluation: from the original acquisition, to annual financial reporting, to major renovation and new construction projects.

In PwC, we have found a partner that can support us competently and flexibly. We appreciate this longstanding, uncomplicated and reliable relationship.

Daniel Petitjean, CEO, Warteck Invest AG

Solution

Warteck Invest was seeking a partner for real estate appraisals and chose PwC for various reasons: on one hand because PwC is the only provider with a real estate team in Basel and, on the other, the firm was one of the first appraisal experts to apply the DCF method in determining the current market value of real properties. For Warteck Invest, PwC counts on immopac® – Switzerland’s the leading provider of real estate asset valuation and portfolio management software. With this proven, database-driven tool, parameters such as the rental/lease income, maintenance/management costs, market situation and quality of the property can be evaluated in detail. Warteck Invest then incorporate those findings into its planning process.

Flexible generation of different scenarios

The tool was precisely tailored to the specific needs of various professional appraisers – in part, even with totally new program elements. Thanks to this made-to-fit solution, all information from various perspectives can be linked and depicted – a tremendous aid in the acquisition or management of a property. The end result: precisely detailed, highly transparent appraisal reports as well as data and evaluations that support management decision-making and portfolio analyses

Result

Quality, accurateness, flexibility and swiftness are of decisive importance to Warteck Invest when it comes down to real estate appraisals. The PwC evaluation team can offer all of that, thanks to their comprehensive know-how, multifaceted capabilities and – perhaps most importantly – the size of the team.

  • Quality: The PwC reports are significantly more understandable and more clearly presented than the norm.
  • Accurateness: PwC calculates the cost of upkeep by applying the highly precise “component model”; the competition doesn’t.
    Flexibility: Thanks to the size of the team, PwC offers clients the appropriate resources to tackle any situation and satisfy any need.
  • Swiftness: In acquisition appraisals, PwC presents the proposal in just a few days’ time so the client can decide and act rapidly.


Comprehensive know-how under one roof

The extensive internal resources of PwC are an additional decisive advantage. For example, the firm can mobilise its audit division when the correct valuation approach needs to be chosen in an appraisal. In turn, that reduces the time and effort Warteck Invest expends in collaborating with its own auditors. Another major plus is proximity – digital communication one way or the other. Thanks to its presence in Basel, the PwC team can discuss pressing matters with the client face-to-face and at any time.

Longstanding, on-site collaboration

PwC and Warteck Invest have been working together since 2001, thus over the years both firms have built up a valuable business partnership. This reliable continuity has contributed a lot to mutual trust – a key factor in such a close collaboration. The related mandate is granted every three years, and a prerequisite for its renewal is a continual enhancement of the evaluation tool – not to mention the innovativeness, flexibility and quality of advice.

Contacts

Kurt Ritz

Partner Advisory, Zurich, PwC Switzerland

+41 58 792 14 49

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