BCR S.A, Romania

Client: BCR S.A. –Erste Group
Location: throughout Romania
Size or value: Portfolio of over 200 properties,
approximate value €250 mil


Type Projects

Date 01/01/0001

Services used:
Valuation
Research

Partnered with:
Activ’s network of collaborators in Romania

Tax & impairment test valuation

Background
Our client needed a valuation update for tax purposes, for 71 properties out of the total of 223. Upon the agreement of the initial instruction, a new request was issued, to asses the fair value and value in use, in connection with the impairment test for accounting purposes under IFRS.

Requirements
The tax valuation, being ruled by law, raised no significant issues. We have provided an inspection schedule to the owner, with details of each valuer that will undertake the visit. In the same time we have provided our collaborators with an inspection template to benefit from uniformity of the collected data in view of centralization within a data base.
The impairment test was more demanding project, as the client requested a complex product, involving valuation services to asses fair value and value in use (not defined by the IVS –RICS standards), and as well a research study based on statistical evolution of the real-estate market that would provide individualized indexes or their entire portfolio.

Solution
The tax valuation was carried-out swiftly and on time, with a positive feedback from the client side.
For the impairment test we split the service with our research department, considering that in fact two distinct services have been requested. The research study gathered evolution data from 2015 to date, and assessed evolution indexes year-on-year. Considering that out of the 200 + properties some shared similar characteristics in terms of city size, local economy, purchase power, etc., we have split the portfolio in some 60 categories based on the homogeneity of the properties’ characteristics mentioned above. The obtained indexes have been applied to historical values in the accounting books, resulting the requested value. For the value in use, we have referred to IFRS, and defined a special value that would reflect the requirements of the client.

Reward
A very positive feedback has been provided by the client, being thankful beside the quality of the output, for our resourceful solutions, understanding of the task and celerity of our response.

Project lead: cristian.negrea@activpropertyservices.ro