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Real Estate

Overview

Over 25 years’ experience providing independent debt and hedging advice.

We advise on hedging interest rate and foreign exchange risk as well as debt raising or restructuring. With over 25 years’ experience in the market, we have an unrivalled understanding of the sector.

Our clients include publicly real estate companies, REITs, funds, private investors and also operating asset classes such as PRS, self-storage, healthcare, hotels and student accommodation.

We know which financial counterparties are the right fit for your business. No matter which market segment or geographical jurisdiction, we work with you to remove complexity and provide flexible solutions that benefit your bottom line.

Our debt advisory team can evaluate your funding requirements and advise on the most appropriate debt structure in terms of covenants and cost. The volume of transactions we advise on means you gain access to a wide network of potential debt providers and capital market sources.

How we help

Debt Advisory

We analyse your portfolio or individual assets, and advise on the best terms and conditions that can be achieved, taking into account varying market conditions.

The breadth of our experience means you gain access to a wide network of potential debt providers and sources including banks, pension funds, insurance companies, specialist debt funds, alternative lenders, private placement and the retail bond market.

We are perfectly positioned to communicate your needs to the relevant markets, ensuring that you get the best possible results.

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Interest Rate Hedging

Interest rates changes can adversely impact the profitability of a company.

Interest rate exposure needs to be understood and managed in the context of the sensitivity of the business to fluctuations in rates.

Rates risk typically arises from floating rate borrowings, which means that hedging solutions often need to satisfy lending conditions, while still supporting business needs.

We have experience in all interest rate derivative markets which means we can assist you irrespective of the jurisdictions in which you operate.

We advise on hedging strategies, negotiate pricing, assist with documentation and benchmark rates; helping you to achieve the best pricing possible.

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FX Hedging

Failure to identify, evaluate and hedge against foreign exchange risk can lead to significant losses for your business.

Our experience in advising on foreign exchange risk means we can guide you through any challenge you face – whether that is evaluating your exposure in relation to competitors, managing the uncertainty around the timing and size of exposures or managing liquidity and credit constraints of a hedging programme.

JCRA will work with you to evaluate your FX exposure and then design and execute bespoke hedging strategies that are aligned with your objectives.

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Commodity Hedging

We understand the interaction between your commodity exposure and other commercial arrangements.

Commodity risk covers a broad range of exposures creating complexity across various areas of your business and often introduces currency risk. JCRA understands this interaction between your commodity exposure and your other commercial arrangements such as debt covenants and supplier arrangements.

Our pricing capabilities provide you with complete transparency, and our expertise in this area allows us to source the best hedge counterparties for your complex needs.

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Inflation Hedging

Inflation risk can arise within a business either explicitly, through a contractual arrangement, or implicitly, through cost or revenue base.

Risk associated with index-linked income or expenditure is particularly prevalent in long-term contracts commonly found in project finance, utility companies, and rental agreements.

Our team can advise you on how to evaluate your exposure to inflation, and identify any natural offsetting hedge already present in your business.

We can then ensure that the most appropriate derivative product chosen and will negotiate fair and transparent pricing on your behalf.

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Hedge Accounting and Valuations

We can ensure accuracy in the reporting of your derivative instruments.

Accounting for derivatives under IFRS (IA39 and IFRS9), USGAAP and other local standards (e.g. new UK GAAP, FRS101 and FRS102) can often be complex to understand and implement. Entities wishing to avoid earnings volatility due to hedging activities that could adversely impact EBITDA and distributable reserves need to understand the accounting implications of hedging.

We can support the hedging decision from the outset by providing expert accounting assistance, recommending the most appropriate hedging instruments from an accounting perspective.  We can then help you to implement the most effective strategy to reduce or neutralise income statement volatility.

We make post-trade accounting for derivatives easier, assisting with post-trade valuations, hedge accounting processes (documentation, effectiveness testing, support with understanding journal entries), disclosure notes and stakeholders questions (mainly external auditors) on a monthly, quarterly or annual basis.

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Cash Management

The risks inherent in managing surplus cash are counterparty credit risk, concentration risk and liquidity risk.

We work with you to establish the intentions for the cash holdings and consider the relative importance of security, liquidity and yield.

We advise on cash from a risk management perspective and will incorporate a wide range of short-term investment opportunities, including bank treasury deposits, call accounts and money market funds, and design and document bespoke cash management policies and strategies.

Our independence means we refuse any introductory commissions from cash product providers, instead requesting that they divert this payment to you in the form of an improved rate of return.

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Dispute Resolution and Expert Witness

If you have a dispute related to hedge mis-selling, our experience and independence mean we are well placed to help with the resolution of your case.

Whether in mediation or in a full litigation under the CPR35 guidance for Independent Expert Witness, our systems can recreate historical markets in which the instrument was traded to provide context and determine whether the hedge was suitable and appropriate at the time.

A hypothetical hedging strategy is designed alongside the cost implications and is used to benchmark the hedge under dispute and provide guidance on an acceptable level of redress using the output of the counterfactual calculation.

You may need an expert witness if you have initiated a legal claim and require independent input as part of the litigation process. We can assist under instruction from legal counsel on the case. Our service encompasses the aspects described above and delivers an in-depth appraisal of the communication between defendant and claimant pre, during and post hedge execution.

In the UK, all reports comply with requirements set out in Practice Direction 35.

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Clients we have helped

These are just some of the companies we have worked with:

 

Real Estate Successes

hedging property
Success stories
Hedging a USD investment in Chinese property
Real Estate June 2018
Success stories
Student housing portfolio refinancing
Real Estate June 2018
Success stories
Interest rate hedging profile for NREP
Real Estate April 2018

Leading Real Estate Experts

View full team
Shripal Shah Director

T: +44 (0)207 493 3310
Email Shripal

Shane Canavan Director

T: +44 (0)207 493 3310
Email Shane

Ivan Harkins Group Chief Innovation Officer

T: +44 (0)207 493 3310
Email Ivan

Andrew Simmons Director

T: +44 (0)207 493 3310
Email Andrew