Risks related to the geomix within our portfolio
- Demographic risks: The risk of a declining or aging population. Risks are managed by conducting research prior to market entry and continuous monitoring (as part of the asset allocation study) of demographical changes after market entry.
- Every country is subject to different degrees of political risks, relating to government stability and level of democracy, economic risks, such as vulnerability to economic shocks and current account imbalances
- and business climate risks, such as legislative framework, corruption and bureaucracy. These risks are assessed as part of our market research prior to market entry. After market entry our decentralized business model with local management allows us to respond quickly to changing circumstances. In addition we monitor these risks centrally by using specialised research agencies and sector reports.
- Environmental risks like natural catastrophes are preventively assessed as part of the investment decision and potential damages are covered by our group insurance policy.
- Market attractiveness risks: In our location selection we take into account the risks related to the prerequisites necessary for the good execution of our activities. These prerequisites include: demography,
- the economic situation and quality of the consumer market, such as sustainable and stable economic growth and purchasing power. Other factors we consider are whether the country has a real estate
- market to offer that is suitable for our business, this includes available shopping centre space (per capita), spatial planning laws/regimes, available investment and/or (re)development opportunities, a transparent investment market and the availability of a skilled work force, both in terms of Corio employees and external advisors, like appraisers, lawyers or developers. Besides individual market risks, there are also risks related to the right combination of markets:
- To mitigate the portfolio risk we use allocation models to determine the asset allocation mix that offers us an optimal risk-return profile. We also take into account whether this mix is feasible within the markets taking into account market share, the size of the portfolio, whether the right product is available and the possibility of achieving critical mass.