The Real Estate Industry

The Real Estate and Construction Industry Presented by: Group 5 Tanya Gans Mathias Jaeggi Marienma Perera Monique Saca Melanie Wattebeld The Industry: Real Estate The Industry The Companies • Definition : Land, and all that it entails • Uses: wide variety of purposes – Including but not limited to: retailing, offices, manufacturing and housing Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss • The objective : create value by developing land or land with attached structures to sell or to lease • The success or failure dependent on many factors: – For example, economic conditions, and demographics Quantitative Comparison Crisis Conclusion The Industry: Construction The Industry The Companies • Three segments: – Building – Heavy/civil – Industrial Chosen Companies Comparison Companies: •Homex Market Potential-Opportunity Vs. Risk •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion The Industry The Industry The Companies RATIO REUTERS YAHOO FINANCE P/E Ratio ROE Dividend Yield Long Term Debt to Equity Price to Book Value 0.73 0.68 0.01 128.83 2.21 10.96 0.025% 0.03% 60% 2.04 Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Gross Margin Net Profit Margin Price to Free Cash Flow Current Ratio Interest Coverage 3.6 6.67 6.65 1.74 0.01 3.60% -14.1% Quantitative Comparison Crisis Conclusion Real Estate Investment TrustREITs The Industry The Companies Comparison Chart Chosen Companies •Homex •Boygues •Brookfield Assets •Maple Tree •Swiss • A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. • 3 Types: – Equity REITs – Mortage REITs – Hybrid REITs Quantitative Comparison Crisis Conclusion Are REITs right for your portfolio? The Industry The Companies • REITs Benefits: – Diversification – a key to minimizing overall risk Comparison Chart Chosen Companies •Homex •Boygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Are REITs right for your portfolio? The Industry The Companies – – – – Dividends Liquidity Transparency. (Tax & Markets) Investment Performance Comparison Chart Chosen Companies •Homex •Boygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion The Companies The Industry The Companies National Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss International Quantitative Comparison Crisis Conclusion Chosen Companies The Industry The Companies National Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss International Quantitative Comparison Crisis Conclusion Comparison Chart The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable trend analysis Shareholder friendly information including key ratio analysis HOMEX :) :) :) :) :) :) :) BOUYGUES :) :) :) :) :) :) :) :) :S :S FIRMS Brookfield :) / :( :) :S :) :) :) :) :) Maple Tree :) :) :) :) :) :) :) :) :) :) :) Swiss Prime Site :) :) :) :):) :):):) :):):) :) :) :) :) :) :S :):):) Quantitative Comparison Crisis Conclusion Homex The Industry The Companies • Its a vertically-integrated home development company. Chosen Companies Comparison Companies: •Homex • Founded in Culiacán, the capital of Sinaloa state, in 1989. • Focused on affordable-entry level and middle-income housing in Mexico. •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion “We are not only home builders we develop successful communities!” Homex The Industry The Companies Chosen Companies Comparison Companies: •Homex •Their Strategy & Competitive Advantages •Conservative Financial Position •Continue to build and Contribute to Successful Communities •Standardized Business Process •Experienced & Committed Management Team •Their Commitments and overall Performance in 2007, A. Strengthen the Financial Performance B. Geographic Expansion C. Improve the quality of life of Stakeholders D. Being Innovative E. Improving the layout of cities. F. Creating Effective Partnerships. •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Homex The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Strength and Weaknesses Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable enable trend analysis Shareholder friendly information including key ratio analysis HOMEX :) :) :) :) :) :) :) :) :) :) Bouygues The Industry The Companies • Subsidiary of the Bouygues group Chosen Companies Comparison Companies: •Homex • • One of the world's leading construction firm Operating in building, engineering and electrical contracting and maintenance •Bouygues •Brookfield Assets •Maple Tree •Swiss • • Operating in over 80 countries has adopted a structured strategy with regard to sustainable development Quantitative Comparison Crisis Conclusion Bouygues The Industry The Companies • Subsidiary of the Bouygues group Chosen Companies Comparison Companies: •Homex • • One of the world's leading construction firm Operating in building, engineering and electrical contracting and maintenance •Bouygues •Brookfield Assets •Maple Tree •Swiss • • Operating in over 80 countries has adopted a structured strategy with regard to sustainable development Quantitative Comparison Crisis Conclusion Bouygues The Industry The Companies • Subsidiary of the Bouygues group Chosen Companies Comparison Companies: •Homex • • One of the world's leading construction firm Operating in building, engineering and electrical contracting and maintenance •Bouygues •Brookfield Assets •Maple Tree •Swiss • • Operating in over 80 countries has adopted a structured strategy with regard to sustainable development Quantitative Comparison Crisis Conclusion Bouygues The Industry The Companies Development strategy Chosen Companies Comparison Companies: •Homex Key Priorities: •Electrical contracting and maintenance •Public-private partnerships and infrastructure concessions •Property development •Business expansion •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Bouygues The Industry The Companies Some numbers (Quantitative aspects) Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Bouygues The Industry The Companies Strength and Weaknesses Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable enable trend analysis Shareholder friendly information including key ratio analysis BOUYGUES :) :) :) :) :) :) :) :) :S :S :) Bouygues The Industry The Companies Strength and Weaknesses Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable trend analysis Shareholder friendly information including key ratio analysis BOUYGUES :) :) :) :) :) :) :) :) :S :S :) Bouygues The Industry The Companies Strength and Weaknesses Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable trend analysis Shareholder friendly information including key ratio analysis BOUYGUES :) :) :) :) :) :) :) :) :S :S :) Bouygues The Industry The Companies Strength and Weaknesses Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable trend analysis Shareholder friendly information including key ratio analysis BOUYGUES :) :) :) :) :) :) :) :) :S :S :) Bouygues The Industry The Companies Strength and Weaknesses Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable trend analysis Shareholder friendly information including key ratio analysis BOUYGUES :) :) :) :) :) :) :) :) :S :S :) Brookfield Assets The Industry The Companies • Chosen Companies Comparison Companies: •Homex A Global Asset Manager (established in 2005, Canada) – Assets under management: Approx. $90 billion USD – Main platforms: • Commercial Properties (gross margin: $1 548 000 000) • Power generation (gross margin: $611 000 000) • infrastructures (gross margin: $290 000 000) • • Work force: Over 10,000 employees Offices and operations locations: Americas, Europe, and Australasia Main focus: high quality long-life assets – – – That generate sustainable cash flows, Require minimal sustaining capital expenditures Tend to appreciate in value over time. •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion • Brookfield Assets The Industry The Companies • Goal: – “To establish Brookfield as a global asset manager of choice for investment clients who wish to benefit from the ownership of these types of assets.” Chosen Companies Comparison Companies: •Homex • Primary Objective: – Continue to generate increased cash flows, and as a result, higher intrinsic value on a per-share basis over the longer term. •Bouygues •Brookfield Assets •Maple Tree •Swiss • Targets: – The long-term rate of growth of operating cash flow on a per share basis = 12% – Cash return on equity= 20% Quantitative Comparison Crisis Conclusion Brookfield Assets The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Strength and Weaknesses Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical information to eneable enable trend analysis Shareholder friendly information including key ratio analysis Brookfield :) / :( :) :S :) :) :) :) :) :) Brookfield Assets The Industry The Companies Financial Performance and Trends Negative • Inconsistency of results • Report written data = Financial data • • Examples: gearing ratio and current ratio Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Results are altered due to: • • • Change of accounting policies in 2004 Restructuring of the company in 2005 No mention of investment reevaluations Quantitative Comparison Crisis Conclusion Brookfield Assets The Industry The Companies Financial Performance and Trends Positive • Share value has increased by 26% over the last three years Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Maple Tree The Industry The Companies About Maple Tree • • • • Leading real estate company in Singapore with an Asian focus. $5.7 billion of real estate assets – office, logistics, industrial, business park and retail/lifestyle properties Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Regional presence: offices in Singapore, China, Hong Kong, India, Japan, Malaysia and Vietnam Corporate philosophy: partnership for mutual success with our stakeholders Quantitative Comparison Crisis Conclusion Maple Tree The Industry The Companies Portfolio of Assets • • • • large integrated mixed-use developments Offices Logistic properties Industrial and retail properties Chosen Companies Comparison Companies: •Homex Services • - •Bouygues •Brookfield Assets •Maple Tree •Swiss Capital Management Real Estate Investment Trusts Private Real Estate Funds Quantitative Comparison Crisis Conclusion • - Asset Management Asset management services Property Services Maple Tree The Industry The Companies Business Focus • Growth strategy - Staying Focused - Being Nimble - Being rigorous - Positioned for growth Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss • Primary objectives Value creation from mixed used development Growing capital management Business Quantitative Comparison Crisis Conclusion - Channeling success trough their people Expanding further within Asia Maple Tree The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Strength and Weaknesses Qualitative Aspects Clarity Transparency Corporate Social Responsibility Corporate Governance Availability of historical enable information to eneable trend analysis Shareholder friendly information including key ratio analysis Maple Tree :) :) :) :) :) :) :) :) :) :) :) :S Maple Tree The Industry The Companies Financial performance and trends Chosen Companies Comparison Companies: •Homex Negative •They present the information of 2007 as 2008, which makes the comparison more confusing between the companies analyzed • Inconsistency of information year to year • Key financial information very hard to find or understand for people with less knowledge on the subject •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion • Sometimes not very clear or deep information for the financial statements Swiss Prime Site The Industry The Companies • First Swiss specialist real estate investment company. •Portfolio size: CHF 3.7 billion • Real-estate-picking strategy: Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Prime Site • “comprises top-class commercial properties at selected Swiss business locations.” Quantitative Comparison Crisis Conclusion • Listed on the SIX Swiss Exchange since April 2000 • Market capitalisation: Approx. CHF 1.6 billion Swiss Prime Site Figures in 30.09.2008 30.09.2007 The Industry The Companies EBIT CHF m Change in fair market value (IAS 40) Equity ratio Borrowed capital ratio ROE (weighted) ROIC (weighted) without effect of revaluation * EBIT EBIT margin Profit for the period CHF m % CHF m 120.7 76.7 70.9 115.2 74.5 67.3 32.9 CHF m % % % % 36.3 63.7 8.7 4.9 34.1 65.9 12.4 6.3 94.8 153.6 210.0 Change in % -26.9 Chosen Companies Comparison Companies: •Homex -65.3 6.5 -3.3 -29.8 -22.2 •Bouygues •Brookfield Assets •Maple Tree •Swiss Prime Site Quantitative Comparison Crisis Conclusion 4.8 3.0 5.3 Swiss Prime Site Market assessment of the individual properties The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Prime Site Quantitative Comparison Crisis Conclusion market value of > CHF 20 million market value of < CHF 20 million Swiss Prime Site The Industry The Companies Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Prime Site Quantitative Comparison Crisis Conclusion Strength and Weaknesses Qualitative Aspects Swiss Prime Site Clarity :) :) :) Transparency :):) Corporate Social Responsibility Corporate Governance :):):) Availability of historical information to eneable :):):) enable trend analysis Shareholder friendly information including :):):) key ratio analysis Quantitative Comparison The Industry The Companies LIQUIDITY & LEVERAGE Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Quantitative Comparison The Industry The Companies • PROFITABILITY Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Quantitative Comparison The Industry The Companies • EFFICENCY Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion Quantitative Comparison The Industry The Companies SHAREHOLDERS Chosen Companies Comparison Companies: •Homex •Bouygues •Brookfield Assets •Maple Tree •Swiss Quantitative Comparison Crisis Conclusion The Crisis The Industry The Companies • Asset Bubble burst – Mainly mortgage driven Chosen Companies Comparison Companies: •Homex • Direct and Indirect effects •Bouygues •Brookfield Assets •Maple Tree •Swiss • Primarily the result of irresponsible banking practices • “Likely the most severe global crisis since the great depression” - UNECE Environment, Housing and Land Management Division Quantitative Comparison Crisis Conclusion Conclusion The Industry The Companies The Companies: •At first glance: •Clarity, ease of reading, and transparency Chosen Companies Comparison Companies: •Homex •After deeper analysis: •Inconsistent and missing data •Bouygues •Brookfield Assets •Maple Tree •Swiss •No real similarities between companies •Due to differentiated operation platforms Quantitative Comparison Crisis Conclusion The Industry •The REITs are a good investment tool for risk adverse investors •Good for portfolio diversification