What’s the cap price and what’s its relationship with the FII


On this information you’ll study to know and perceive in a sensible method one of many foremost indicators used within the evaluation of the return potential of actual property and actual property funds: the cap price. Perceive the primary elements that affect the indicator and if there actually is a perfect share to search for.

• What’s the protection price?
• How it’s calculated
• Calculation of the cap price in FII
• What impacts the protection price
• How the tariff is analyzed within the FII
• Optimum cap price degree for FII
• FII with a better cap price

What’s the cap price?

cap price is an abbreviation of the English time period “capitalization price “, which stands for capitalization price. Merely put, it’s how a lot a specific property returns in fairness in relation to the quantity invested.

How is it calculated?

The calculation of cap price is finished as follows:

(Complete hire obtained in 12 months / Property worth) x 100

Instance: Think about an condo purchased for R $ 1 million and rented for R $ 10 thousand a month. In a single yr, the rental earnings can be R $ 120,000, which divided by R $ 1 million will end in 0.12. Multiply by 100 and also you get 12%.

That is, due to this fact, the return on funding within the analyzed interval.

On this case, the mathematical illustration can be:

[(10.000 x 12/1.000.000) x 100] = 12%

And the way is the cap price calculated in actual property funds?

On this universe, the calculation of the capitalization price undergoes the next “changes”: the annual hire is changed by the annual actual property earnings of the fund and the asset worth is exchanged for the market worth of every portfolio, explains Marcelo Potenza, fund analyst Itaú BBA actual property.

Instance: Suppose the ABCD11 fund has month-to-month recurring earnings of R $ 10 million and a market capitalization of R $ 1.2 billion. To calculate the cap price, merely annualize the month-to-month earnings, i.e. multiply it by 12, divide it by the market worth of the fund and multiply the end result by 100, which is able to end in 10%.

The mathematical illustration would seem like this:

[(10.000.000 x 12/ x 100] = 10%

Potenza feedback that the cap price can nonetheless be tailored for the fund emptiness and the market worth may be calculated from the idea of “enterprise worth (EV)”, Which considers: market worth + payables – money.

In line with the specialist, utilizing the identical numbers as within the earlier instance, however contemplating a 5% vacation and that the market worth is the same as the EV, we now have the next calculations:

THE) cap price = [(10.000.000*12/ * 100] = 10%

B) cap price adjusted = [((10.000.000*12)/(1-5%))/]* 100 = 10.53%

From the identical calculation methodology, there are mainly two variables that have an effect on the cap price: the hire and the worth of the property.

Due to this fact, on the one hand, any issue that impacts actual property income may also have an effect on the speed of return. Lease revisions, inflation pass-throughs (HICP or PGI-M), emptiness price adjustments, or incidents of default, for instance, can have an effect on the cap priceexplains the specialist from Itaú BBA.

On the backside of the invoice is the acquisition worth of the property. Whether it is too excessive, the cap price can be decrease. Conversely, a lower cost tends to extend the potential return on funding.

“The perfect state of affairs, due to this fact, is that of a better hire and a decrease worth within the acquisition of the property,” says Marcos Correa, a specialist in actual property funds at Suno Analysis.

Cap price and FII: how is the speed analyzed?

In actual property funds, the cap price property have to be thought of in comparative analyzes and along with different indicators – by no means in isolation – underline the consultants interviewed by the InfoMoney.

In line with Franklin Tanioka, head of analysis at RBR Asset, the record of things to observe contains the working section (places of work, logistics, purchasing, and many others.), location, high quality of actual property property and liquidity of the fund, among the many different.

“The upper the standard of the property, the decrease the danger inherent within the funding and, consequently, the decrease the required return,” says the specialist. “That’s, the cap price tends to be decrease.”

Potenza, from Itaú BBA, additionally cites points equivalent to emptiness, diversification, default and the connection between the inventory market worth and the e-book worth of the fund.

As an example the purpose, it’s potential to think about a property within the capital of São Paulo positioned on Avenida na Faria Lima (thought of the mecca of banks and funding boutiques), with a score “triple A“, A lot desired and with hire, definitely, costly.

“OR cap price almost definitely it is going to be between 6% and seven%, as a result of it’s a good property and the acquisition worth can be excessive ”, estimates Correa, from Suno.

A concrete case occurred in Might 2022, when GTIS Companions bought 62% of the Infinity Tower business constructing, positioned in Faria Lima, which brings collectively tenants equivalent to Credit score Suisse, Goldman Sachs, Meta and Bloomberg. The transaction was closed for US $ 172 million, equal to R $ 846 million on the time, and the cap price it was about 6.7%.

Underneath the phrases of the settlement, the sq. meter was estimated at R $ 39,200, thought of the best quantity paid within the nation for a single property.

If, however, the parameter is a middle-class constructing, in a area additional away from the middle of São Paulo, the prospects change.

Within the case of Alphaville, for instance, the place free area is mostly greater, it’s potential that this property can be bought at a lower cost, which might enhance the cap price to the home from 8% to 9%, says Correa.

The rationale is that as a result of the danger is larger, the return should even be higher.

“So when will we analyze this indicator [cap rate] in funds or in the actual property market as a complete, it’s needed to know the kind of asset concerned and take these traits under consideration ”, says the Suno specialist. “Solely from there’ll it’s potential to evaluate whether or not the yield is excessive, low or whether it is satisfactory”.

Correa additionally remembers that it’s potential to make comparisons. If there are two very comparable properties in the identical area, theoretically the cap charges it needs to be comparable.

He believes that the rental values ​​are unlikely to be the identical, however the truth that the properties have comparable traits permits this evaluation, at the very least when it comes to estimates.

“When actual property funds in the identical sector purchase completely different properties, analysts usually examine the circumstances of every to evaluate how costly or low-cost that asset was.”

What can be a “good” degree of cap price for an FII?

All of the consulted consultants affirm that there is no such thing as a degree of return that may be recognized, in a generic method, as “preferrred”.

Tanioka, of RBR Asset, recollects that the cap price is a measure of the anticipated return and, due to this fact, it may be roughly fascinating when contemplating the danger of the enterprise.

In line with him, it’s common to check the capitalization price with the yield of a long-term authorities bond, thought of the least dangerous funding throughout the universe accessible to buyers. “Funding in FII and actual property ought to require a premium over authorities bonds, given the upper funding danger.”

On the Itaú BBA Potenza additionally reinforces the impossibility of generalizing the interpretation of the cap price. “The perfect is to research a sequence of actual property funds collectively and weigh in, in addition to take into account the second of the market.”

For instance, he cites the yr 2019, the pre-pandemic interval of Covid-19, when some firm slab funds recorded a degree of cap price between 5% and 6%. “Right now these similar funds have greater ranges, as a result of the macroeconomic context is completely different”.

The potential evaluation can also be legitimate for logistic warehouse funds in comparison with industrial warehouse funds. In a really common method, the previous permits the property to be tailored to the vast majority of tenants, whereas the commercial one normally has particular elements, modeled for a specific shopper, which presupposes a better yield, says Correa, of Suno.

As there is no such thing as a database available on the market that collects this info, the next desk reveals the values ​​calculated by Itaú BBA, contemplating the primary actual property funds monitored by the establishment. Test the record:

ticker Section cap price Protection price modified
AIEC11 firm plates 13.41% 13.41%
BRCR11 firm plates 9.92% 12.43%
HGPO11 firm plates 7.97% 8.19%
JSRE11 firm plates 9.20% 10.62%
KNRI11 firm plates 8.48% 9.05%
PVBI11 firm plates 7.85% 7.86%
RBRP11 firm plates 11.06% 11.52%
RCRB11 firm plates 7.46% 11.02%
SARE11 firm plates 9.32% 9.32%
WINE11 firm plates 8.88% 9.27%
HGBS11 purchasing facilities 8.47% 9.11%
HSML11 purchasing facilities 8.70% 9.14%
MALL11 purchasing facilities 8.37% 8.72%
VISC11 purchasing facilities 8.35% 9.03%
XPML11 purchasing facilities 5.82% 6.07%
BRCO11 logistic warehouses 10.61% 10.61%
BTLG11 logistic warehouses 7.48% 7.71%
HSLG11 logistic warehouses 9.27% 9.31%
LVBI11 logistic warehouses 10.15% 10.20%
SDIL11 logistic warehouses 9.58% 9.83%
VILG11 logistic warehouses 10.29% 10.29%
XPLG11 logistic warehouses 9.80% 10.03%

Uncover the step-by-step information to dwelling on an earnings and receiving your first hire in your account within the coming weeks, with out having to personal a property

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