RIWIS Online - Scoring Methodology


RIWIS Online - Scoring Methodology

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Methodology

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RIWIS Scoring - Methodology

In order to assess the sustainability of locations with regard to property market investments a large number of indicators can be included into a Scoring system. But rather than to include every available indicator BulwienGesa AG tries to keep the system lean and easy to understand. Therefore only a smaller number of variables (key factors) get analysed, however from different points of view. Calculations follow a strict bottom-up strategy allowing differentiated statements on strengths and weaknesses of a location.

The over-all result of RIWIS Scoring is based on the results for each submarket:

Office
Retail
Residential

Point System

Each location can receive between 0 and 100 points for each submarket, thus in total a maximum of 300 points. Taking into account that each submarket shows different structures, there are different codings for linking the point system to our scoring scale of 6 grades (1a, 1b, 2a, 2b, 3, 4). The following table gives detailed information about this system.

Point System and Scoring Scale

Score Office Retail Residential Over-All

1a 100 to 70 100 to 70 100 to 60 300 to 200

1b 70 to 60 70 to 60 60 to 55 200 to 175

2a 60 to 55 60 to 55 55 to 47.5 175 to 157.5

2b 55 to 50 55 to 50 47.5 to 42.5 157.5 to 142.5

3 50 to 45 50 to 45 42.5 to 37.5 142.5 to 127.5

4 less than 45 less than 45 less than 37.5 less than 127.5

Temporal Perspectives

In order to obtain a comprehensive assessment of a location each submarket is analysed on three different temporal perspectives, each based on up to 15 relevant indicators
The historic development gives information about processes in the past compared to developments in other locations. In particular with regard to sustainability and volatility these indicators describe different trends of demand and supply and therefore indicate different risk levels.

One rather important factor for assessing locations is the current situation of the property market regarding rents, yields, market volumes and transactions.

Especially investments on the property market are often long-term investments. Therefore the future perspective is part of this assessment, and is split into short-term (1 to 2 years) and medium-term (3 to 5 years) trends.

For all differences in the number and selection of variables for each of these perspectives the methodology of calculating partial results is the same in all of them. There are 0 to 100 points for each indicator, with 0 points for the least positive value and 100 points for the best. The partial result is the weighted average of these indicators, depending on reliability and influence.

Over-All Result

To follow the bottom-up strategy the over-all result is calculated by aggregation of each temporal perspective result to a submarket result and iterative aggregation of these results to the over-all result. Each time different importance is taken into account by using weighted average values.