How to value properties overseas - DCF (?)

Okay so I have a DCF valuation problem/buyout problem. I'm basically valuating a company and as you guys may know you value the company itself and then add the value of the properties and that what I'm going to offer my seller. 

I have or can valuate the property that is in my home country but I can't valuate the properties that is overseas, for example Malaysia or China. I have no idea how they value their industrial properties there. What is the best solution for this? How do I get a good valuation of the properties to make my bid a strong bid.

//Stressed out fucking student

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Comments (9)

  • Intern in IB-M&A
Nov 26, 2021 - 10:52am

You either do a DCF using the cash flow of the entire company (in which case the location of assets doesn't matter) or you use the liquidation / book value of those assets

Nov 27, 2021 - 4:00am

But when you do a DCF you get the company value, you then have to add the value of the properties so that he could get the right value.

Often people rent their buildings and that's why your way works but when they own the property you need to add that value which I can't figure out…

  • Intern in IB-M&A
Nov 27, 2021 - 6:02pm

Brother, you need to recheck what a DCF is. A DCF model is based on the assumption that the value of an asset or company depends on the sum of the discounted cash flows it will produce in the future. So if you have a building, its value depends on the sum of the discounted rents + the discounted value at which you plan to sell it in the future.

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  • Intern in IB-M&A
Nov 27, 2021 - 6:53pm

What is the building used for exactly? If it contributes to the cash flow generation of the firm, its value is already included in the enterprise value you found.

Also, by rent, I meant the one you receive assuming you lease the building.

Nov 28, 2021 - 6:50am

Okay so the building is used for the construction of the products the company sells.

But the property is more valueable as a independent asset than a asset being included in the DCF, since the property and the company has different required rate of return.

We want 20% rate of return for the price we pay for the company but property investors are fine with 7-10% RoR for properties.

Often sellers want to keep their properties or want to sell them separately to a property investor, but in this case he wants to sell it all. That's why I need to value the property separately.

Nov 29, 2021 - 6:59pm

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