Our systems are owned by, and therefore exclusive to, PRUPIM and include the following:

Continually developed since the early 1990s, FAIRVAL is our main ‘worth appraisal’ system. Based on the Dividend Discount Model (DDM) frameworks used to value equities, FAIRVAL is an explicit Discounted Cash Flow (DCF) model which utilises practitioner-adjusted research inputs on required returns and net income growth, and asset cash flow and leasing characteristics to generate a ‘fair value’ for an asset being appraised. This, and the returns related to it, can be compared with observable or anticipated market price and related returns to inform buy, sell or hold decisions.

FAIRMARK is a market-level equivalent to FAIRVAL. It identifies the fair level of yield for a market (rather than on an individual asset). This ‘fair yield’ can be compared with observable yields and buy, sell and hold recommendations made at market level.

PROSPECT is an in-house system built to aggregate data on development pipelines, at different spatial scales, for use in rental market forecasting.

PIRAMID is a proprietary system developed in the late 1990s, to assemble, calculate and store data on our client-fund asset performance in a manner compatible to that produced by the Investment Property Databank (IPD). The system not only allows IPD-type results to be checked and produced for our clients far faster than IPD is able to provide, but it also represents a major data repository upon which bespoke research analyses can be carried out by the research team. (PIRAMID is an acronym – we do know how to spell ‘pyramid’).

By combining the research team’s views on market returns over the medium term with information on how a client-fund’s capital is distributed relatively across those markets compared to its competitor benchmark, our in-house EFFECTS system ‘predicts’ the relative performance of the fund against its benchmark and explains which over-and under-weightings are responsible for the observed outcome. This ‘forward attribution system’ is an input into the strategic recommendations made by the research team. It also contains a modelled estimate of the range of likely differential performance to the benchmark and the sources of that risk.

PMFMS is an in-house system into which all the relevant data held in FAIRVAL appraisals for assets in a given fund can be aggregated. This allows fund managers, at a glance, to assess price versus worth for all the assets in a fund. It allows expected cash flows for all or parts of a fund to be readily displayed to assess ‘diversification of risk over time’ and identify easily any volatility in future fund cash flows. It also permits the fund manager to assess the likely impact of the inclusion or sale of an asset on the future returns and cash flows of a fund.

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