KTI Benchmarking

– performance measurement and analysis for portfolio and asset management

KTI Index

KTI Index: Finnish property investments delivered a total return of 6.2% in 2016
IPD Nordic Annual Property Index

KTI Index is a tool for property investors to measure and benchmark the returns of property investment portfolios. The KTI Index measures the total return of directly held property investments in Finland and it divides the total return into capital growth and income return components. In 2015 the average total return of the Finnish real estate market was 6.3%.

KTI Index can be used for:


  • analysing and benchmarking portfolio returns
  • defining investment strategies for real estate investments: allocations, instrument and sector choices, investments, realisations etc.
  • property valuations and analysis of the parameters affecting the value
  • risk analysis and risk management
  • real estate market analysis
  • investor communication
  • international comparison: KTI Index is consistent with other country indices calculated by MSCI

 

KTI Index is based on:


  • properties of 26 institutional investors, property investment companies and funds: a total of 48 property investment portfolios
  • total value €24.9 billion
  • coverage about 43% of the total property investment market in Finland
  • 2,700 properties
  • includes all major property sectors and major cities, 200 submarkets in total

 

KTI Index benchmark service includes a confidential benchmark report, an analysis session and all market figures calculated from the database. The data can also be downloaded and analysed easily through the KTI Online service (in Finnish).

KTI Rental benchmarking

KTI Rental benchmarking is a tool for investors and asset managers for lease management and development. KTI Rental benchmarking provides information for analysing and comparing submarket-levelled rents, contract terms, occupation rates and tenant turnover. The service is produced for office, retail, shopping center, industrial and residential premises. Rent levels are calculated separately for prevailing agreements and for new agreements which have started during the previous 6 months.

Rental benchmarking can be used for:


  • defining, measuring and monitoring the rent levels
  • defining and optimising lease terms
  • improving the cash flow
  • analysing the rental market development
  • defining a strategy for leasing
  • making investment, disinvestment and allocation decisions
  • defining market values for properties

 

Commercial rental benchmarking is based on:


  • cross cut of 28,000 commercial lease agreements as of September 1, 2016
  • lease agreements situated in 41 localities and 610 submarkets
  • information of rent levels and occupation rates based on property use, location, size, age and lease commencement
  • bi-annual update of new lease agreements (started during previous 6 months)
  • office rental index for monitoring office rental development, base year 1992

 

Residential rental benchmarking is based on:


  • cross cut of 84,300 residential rent agreements as of March 1, 2017 (professional, non-subsidised market)
  • bi-annual update of new lease agreements (started during previous 6 months)
  • residential lease agreements situated in 35 localities and 262 submarkets
  • information of rent levels and occupation rates based on apartment type, location, construction year, lease commencement and finance type (subsidised/non-subsidised)
  • rental indices for monitoring residential rental development, base year 1992

 

KTI Rental benchmarking service includes a confidential benchmark report, an analysis session and all market figures calculated from the database. The data can also be downloaded and analysed easily through the KTI Online service (in Finnish).

KTI Operational cost benchmarking

Operational cost benchmarking is a property investor’s and manager’s tool for monitoring and optimising operational costs. In 2014 the realised average operational cost for offices was 3.74 €/net floor area/month.

Operational cost benchmarking can be used for:


  • optimising resources and costs used for property maintenance
  • analysing factors affecting costs
  • scanning for costs that differ from the market level
  • tracking cost development for own properties and market
  • tracking and comparing energy and water consumption
  • managing service providers and defining service contract terms
  • rewarding personnel and partners

 

Operational cost benchmarking is based on:


  • realised operational costs and consumption information of 1346 residential properties and 627 commercial properties (office, retail, industrial and warehouse)
  • classified data based on location, size and construction year
  • time series since 2000

 

KTI produces annual indices for offices and apartment houses, used for tracking realised operation costs.

The operation costs are divided into 13 cost categories according to the Finnish Accounting Ordinance (30.12.1997/1339) as follows: 1. Administration, 2. Operations and maintenance, 3. Outdoor maintenance (Roadways, parking and grounds), 4. Cleaning, 5. Heating, 6. Water and wastewater, 7. Electricity, 8. Waste management, 9. Insurance, 10. Rent (ground rent, if applicable), 11. Property tax, 12. Other maintenance costs, 13. Repairs + capital improvements.

KTI Operational cost benchmarking service includes a confidential benchmark report, an analysis session and all market figures calculated from the database. The data can also be downloaded and analysed easily through the KTI Online service (in Finnish).

KTI Customer satisfaction bechmarking

Customer satisfaction benchmarking enables measurement and benchmark of the satisfaction and customer experience of the tenant. The service measures tenant satisfaction of the leased premises, the landlord (or landlord’s agent) and the services included in the tenancy.

Customer satisfaction benchmarking can be used for:


  • managing and improving the customer relationship and customer loyalty
  • improving the profitability of leasing
  • managing and rewarding service providers
  • rewarding staff
  • identifying key development areas in the facilities, services or customer interface
  • internal and external communication, customer interaction, strengthening corporate image

 

Commercial property customer satisfaction benchmarking is based on:


  • data from 20 landlords
  • 2510 phone interviews (the average response rate was 72%)
  • feedback received from 1804 office, 465 retail, 159 industrial and 82 mixed space premises

 

Residential property customer satisfaction benchmarking is based on:


  • data from 8 landlords
  • feedback from 6693 residential premises
  • feedback collected in questionnaire form or by online survey

 

The information above is based on the number of participants and data of autumn 2017.

KTI Customer Satisfaction Benchmarking Service includes a company report, a confidential benchmarking report and an analysis meeting. The data can also be downloaded and analysed easily through the KTI Online service (in Finnish).

KTI Corporate responsibility service

KTI Corporate responsibility service looks at the position and success of the company in corporate responsibility issues and compares these to other players in the property sector. The analysis is based on inputs made by the company and its stakeholders to the different sectors of corporate responsibility.

Corporate responsibility analysis can be used for:


  • improving and analysing own functions
  • stakeholder communication
  • defining the social significance and responsibility of one’s own organisation and the whole property industry

 

Corporate responsibility analysis is based on:


  • the KTI responsibility barometer, which surveys and benchmarks the role of corporate responsibility in major organisations of the property industry
    • What is the meaning and role of corporate responsibility in the strategies of major property industry organisations? Where is own organisation in proportion to others?
  • Stakeholder analysis, which evaluates and compares the visions of different stakeholder groups related to economic, social and environmental responsibility
    • What are the key points important to different stakeholder groups? How is responsibility realised? What are the development areas?

 

The Corporate Responsibility Analysis -service includes visibility in the popular review “Responsible Real Estate Business 2016” which:

  • improves the responsibility-image of pioneer-companies in real estate business
  • introduces current topics in corporate responsibility and upcoming trends
  • increases knowledge of the real estate sector’s social significance and it’s economic, social and environmental responsibility issues
KTI Shopping centre benchmarking

Shopping centre benchmarking supports shopping centre management and investment. The service produces indices of visitors and sales on a monthly basis. The service includes also rental analysis for shopping centres, OCR (Occupancy Cost Ratio) figures, operational costs and energy consumption. The service has been developed together with the Finnish Council of Shopping Centers and the players in real estate business.

Shopping centre benchmarking can be used for:


  • developing and managing shopping centre business strategy
  • monitoring and benchmarking the visitors, sales and occupation rate of the shopping centre
  • managing and developing the rental operation
  • analysing the rental figures and OCR (ratio of annual rent to sales receipts) per business sector
  • reviewing and setting targets for the annual income, operational costs and energy consumption

 

Shopping centre benchmarking is based on:


  • information on 40 shopping centres, nearly 70% of the total area of all Finnish shopping centres
  • regional classifications based on the size and type of the shopping centre. Classifications enable comparing the centre to a proper peer group
  • time series since 2013 (visitors and sales since 2011)

Further information:

Pia Louekoski
Account Director
tel. +358 400 959 634
pia.louekoski(a)kti.fi

Jessica Örn
Director
tel. +358 400 910 296
jessica.orn(a)kti.fi

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