DELOR T.

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We use a comprehensive valuation formula to estimate the Internal Rate of Return (IRR) of real estate viager properties in Lyon. After selecting the 7 properties with an IRR less than 5% (best properties from an investor point of view), we assess the initial cash amount to hold to satisfy the risk appetite of our investor: holding the minimum cash amount that results in a 10% probability to inject cash in this operation in the next 30 years. The initial cash amount to hold is EUR 3.1m. Then a sensitivity analysis is performed to highlight the sensitivity of the results to the key model parameters. It appears that longevity, indexation of the monthly annuity, gross rental yield and property maintenance fees are the main risks of such an investment.