Document · NE-INV-005
Risk parameters
The company's risk framework is designed around specific limits, not statements of intent. Each SPV is managed within the same framework, and breaches require documented review.
Section 01
Risk categories
- Market risk
- Exposure to fluctuations in real estate market values. Addressed through conservative acquisition pricing and an operating-income-based approach to returns.
- Credit risk
- Risk of tenant defaults. Addressed through tenant diversification, credit assessments at lease signing, and ongoing monitoring.
- Financing risk
- Risk associated with financing sources and refinancing. Addressed through moderate LTV, long maturities, and advance discussions with lenders.
- Liquidity risk
- Risk of insufficient liquidity for operations and maintenance. Addressed through a mandatory liquidity reserve for each SPV.
- Operational risk
- Failures in processes, systems, or external service providers. Addressed through segregation of duties, documented procedures, and independent audits.
- Concentration risk
- Risk from excessive concentration in individual properties, geographies, or tenants. Addressed at the portfolio level and when approving new SPVs.
- Regulatory risk
- Risk of changes in legislation and regulatory practices. Addressed through ongoing compliance monitoring and dialogue with legal advisors.
Section 02
Risk reporting
The risk and compliance function reports in writing to the board at least quarterly. The report covers the status of individual risk limits, any findings, incidents, and ongoing remediation. Material findings are communicated without delay.
