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Real Estate One Stop Shop

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					Master Sun Consulting –
Business Opportunity
Evaluation

  Need for One-Stop Shop in Real Estate
   Opportunity


   Development and Asset Management


   NRI & HNI : Vacation Home s


   Middle Class : Sales & Marketing


   Conclusions
                           Opportunity
   Economy growing at least 7-8 % per annum

   Unorganized & fragmented real estate sales & marketing channel

   Growing affluence and investment appetite fuelling the concept of
    Vacation Home for lifestyle and investment needs

   Demand for world class development

    Growing asset management & development opportunity for budget
    hotels and service apartments
                                     Target Consumers

                                                                            1.6 million luxury consumers
                                                             Rich           6-7 million very affluent
                                                                            9-10 mid affluent
                      Urban Population                                      11-12 million mass affluent
               10%




                                                                             40 million upper middle class
                                                    50%   Middle Class       72 million up graders
40%


      Bottom of the pyramid   Middle Class   Rich



                                                           Bottom of
                                                                          140 million bottom of the pyramid
                                                          the pyramid
   Opportunity


   Development and Asset Management


   NRI & HNI : Vacation Home s


   Middle Class : Sales & Marketing


   Conclusions
               Land Development – Value Chain
                                                       Value (example)


                                                             Rs 50 Cr
                                   Vacant Land

Concept, plans, approvals,
financial models, business
         plans etc

                                 Developable Land           Rs 200 Cr


Infrastructure (if required)


                               Pre-construction Land        Rs 250 Cr

 Construction finance,
  Contractors, Project
 Management, pre-sales

                                Completed Project
                                                           Rs 1000 Cr
       Land Development Process
  Market
                                   Design brief
 research




                                                     PRE-CONSTRUCTION
World class       Financial
                                Design and concept
architects         analysis



                   Modelling
Marketing
                      and          Business plan
  plan
                  forecasting


 Fundraising       Building
                                    Fundraising
   agent          approvals


  Project         Detailed          Construction
management         plans


 Sales and           Asset
                                    Realisation
 marketing        management




Self           Outsourced
                Development Snapshot
   Customers : Landowners

   Initial Value Proposition
      Maximize the value of asset


   Sustainable Value Proposition
      Market based concepts
      ROI
      Quality of Development
      World class design
      Case studies
                  Development Methodology
                      Pre-Construction
   Financial analysis
        What options are there and which is most profitable?
   Benefits of doing this are
        Differentiated product – able to sell your product in a crowded market
        Delivering what the market wants = building a brand
        Price premium and faster sales rates
        = more profit and less risk
   Then, translating this concept into a site plan and design
   A collaborative effort between Promoters, we and panel architects.
               Development Methodology
                     Business Plan
   BUSINESS PLAN = Who is going to do what to make this project work?
        How are we intending to SELL what we build?
        Who will construct it?
        Who will oversee construction?
        What is the operational and marketing plan?
        How much money do we expect to make and what funds do we require?
        How will we manage the risks of the project?
   Requires decisions on branding and marketing strategy.
   Need full business plan in order to proceed to fundraising .
                Development Methodology
                      Design Brief
   NOT “what can I build?” but “what can I sell?”
   DESIGN BRIEF = What are you going to build and why?
   Market research
        Not just a matter of ordering a report, it needs to be properly analysed
        Need to consider the potential audience for the development and how to reach
         them.
        Need to understand market depth and likely acceptance of concept
        Need hard data (market research) and soft data (customer research)
        Need to identify price points, user preferences, demographics, competitive
         analysis, required features, value drivers etc.
   Financial analysis
        What options are there and which is most profitable?
   Benefits of doing this are
        Differentiated product – able to sell your product in a crowded market
        Delivering what the market wants = building a brand
        Price premium and faster sales rates
        = more profit and less risk
                   Development Methodology
                      Construction & After
   As your development partner, we will provide services as required during
    the construction and asset management / exit phases.
   These may include any of the following:
        Project management services (quality, cost control, timeliness)
        Asset management services (retail mall, hotels, golf course maintenance etc)
        Non-executive project management services
        Development of exit routes / sales strategies to maximise the return to
         Promoters
           Asset Management Snapshot
•   Assets: Budget Hotels, Commercial Complexes, Apartments, etc.
•   Asset Owners : Builders, Business Families
•   Initial Value Proposition
     – Cheaper, more efficient alternative
•   Sustainable Value Proposition
     – ROI, Asset Value Appreciation
     – Credentials & Quality of Assets
     – Capability in sales & marketing, development & other ends of
        the value chain
                 Asset Management : Role
   The asset manager provides the following major services. This is
    not an exhaustive list.
       Maximises the overall profitability of site.
       Analysis, options and recommendations to owner for decisions to be made by
        them
       Implementation to achieve the objectives and decisions of owner
       As required decisions for the general manager and management team based on
        those objectives
       Ensures that the strategy is converted to tactics and implemented with changes
        as required
       Looks at each Area of Operations (see above list) and look for efficiencies,
        improvements, structure, operations and quality
       Create Standard Operating Procedures to capture hotel policy on standards,
        quality, performance measurements
       Leads creation of operating budgets, capex priorities, recommendations and
        implementation
       Builds management team including hiring, reshaping and firing of senior staff,
        setting objectives, performance reviews and bonuses.
       Ensure non-financial objectives are achieved (eg quality, social justice programs,
        PR etc)
   Opportunity


   Development and Asset Management


   NRI & HNI : Vacation Homes


   Middle Class : Sales & Marketing


   Conclusions
   Understanding – Vacation Home

Vacation
            Property owned generally for personal use
Ownership


            A timeshare is a form of vacation property ownership.
Timeshare   The use and costs of running the resort are shared among the owners



Vacation    Renting out a furnished apartment or house on a temporary basis to
 Rentals    tourists as an alternative to a hotel




Vacation    You trade your interval or week for new and different vacation experiences
Exchange    at comparable resorts across the country and around the world


   Segmentation of Vacation Home market internationally
       International Demand Drivers

                      Economy
Baby Boomers          Population
                      Propensity to spend




Interest Rates        Income Levels
                      Rate of borrowing



                      Growth rate
   Tourism            Attracting investment
                      Government Initiatives
                      Conferences

                 Key movers of the Vacation Home market
   Vacation Homes-Internationally
                            Leisure Ac tivities Preferred
                                                                                          Mode Of Purchase F or A Vacation Home
                  Tennis
                                        5%
                                  9%                                                                         14%
                                                 29%
                            10%
                                                                                                       18%


       Golf                 11%                                                                                              68%


                                               20%
                                  16%

                                                                                                    Real Estate     Owners     Builders


   Water Sports   Boating   Hunting/Fishing   Golf     Biking/Hiking   Skiing   Tennis

                                                                                    D esirable Attributes In A Vacation Home

Key Learning's:
                                                                                                       18%
 Internationally activities are critical aspects of Vacation Homes
                                                                                                                      38%
 Brokers / real estate agents play a critical role as channel partners
                                                                                                 22%
 Locational advantage needs to be broadcast for each individual property

                                                                                                             22%



                                                                           Close To Ocean/Lake/River               Sporting Activities
                                                                           Close To Resort Ares                    Mountains/Natural Destinations
                                                                                         Source: National Association Of Realtors 2006
  Vacation Home Buyers: Internationally
         Distance (Miles)         Vacation Home %            Investment Property %
                   25                   44                            69
              25-99                     19                            9
             100-199                    22                            5
             200-499                    1                             *                  Distances between residence & Vacation Home
             500-999                    3                             3
                                                                                                  Usually less than 100 miles
            1000-1499                   *                             6
         1500 and more                  10                            8
         Median Distance                49                            18
* Less than 1 %



              Home Size (Sq.ft)       Vacation Home %            Investment Property %
                        500                   4                             1
                    501-1000                 14                            14
                   1001-1500                 56                            22
                   1501-2000                 11                            31                        Size of home : 1000-1500 sqf
                   2001-2500                  9                            12
                   2501-3000                  5                            10
                  3000 and more               1                            10
                   Median Size               1290                          1700

                                                    Format             California Coastal       South Florida           Golf Destinations   Ski Destinations
                                                    Studio                      600                 600                       700                 NA
                                                    1 BDR                       590                 600                       550                 550
       Average value per sq.ft                      2 BDR                       480                 600                       450                 580
                                                    3 BDR                       NA                   NA                       400                 600
                                              Premiums ($ 000)               50-150               50-300                     50-150             50-100

                                                                                                       Source: Economic Realtors Research
                          US Vacation Home Market
                                                                                   International Vacation Home market
        GDP (In Billion USD)     Vacation home Industry (In Billion USD)            is maturing and seeing considerable
14000                                                                      14       growth
12000                                                     0.10 %           12
                                                                                   The US$ 13 billion Vacation Home
10000                                                                      10       industry in US is 0.10% of GDP as of
                                                                                    2005
 8000                                                                      8
                               0.08 %
 6000                                                                      6       Multiple players    having   unlimited
                                                                                    product offerings
 4000         0.05 %                                                       4


 2000                                                                      2
                                                                                   GDP of US playing an integral role for
                                                                                    burst of Vacation Home industry
    0                                                                      0
                1990           2000                       2005




             Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.S
             Along with high growth rates comes heightened competition
             Brands would soon start at exploiting other geographies
                             India Vacation Home

                                                                                       Given the current economic trends
      GDP (In Billion USD)         Vacation home Industry (In Billion USD)              we can draw the following
900                                                                          0.8
                                                                                        hypothesis:
800                                                         0.10 %
                                                                             0.7

700
                                                                             0.6
600
                                                                                       - The Size of the Vacation Home
500
                                                                             0.5
                                                                                        industry is approximately US$
400
                                                                             0.4        0.757 billion or INR 34,150 Crore
                                                                             0.3
300                           0.08 %

200
                                                                             0.2       Experts predict the GDP growth
100     0.05 %                                                               0.1        rate to be close to 8%, the same
  0                                                                          0          would see a rise in income levels –
            1990                2000                       2005
                                                                                        A factor which is one of the key
                                                                                        growth drivers


                     • Generation X will boost the growth of Vacation Homes in India
                        •India the next growth driver for international companies
       Indian Luxury Consumer: HNI

Married and has kids

Average age = 36-40

CWE= Mostly Male

42% live in joint families

Residing in posh localities

35% of wives working

Owns D/E segment car

44% traveling abroad for vacation,
at least once a year
 Disposable income 9 lac p.a
                Affluent Map Of India
   Predominantly luxury
    consumers are resided in the
    north and west of the country




                                        Source: Technopark
             Vacation Home : Snapshot
•   Vacation Home
     •   100-200 kms from metros around a natural attraction primarily
        hill stations, beaches
     • International Vacation Homes in Dubai, London etc.
•   Customers
     – HNIs & NRIs
•   Initial Value Proposition
     – Variety & convenience of one stop shop
•   Sustainable Value Proposition
     – Needs based development
     – Reach & access to NRIs
     – Destination development and marketing
              Indian HNI : Primary Target
Products                               Needs
   Vacation Home                        Prestige, Ego Value
   Purchase/Lease of Commercial         High Service Quality
   Investment in Real Estate Funds/     Large portfolio of options
    REITs                                Customized Advisory
                                         Relationship Building
Competitive Landscape                    Credibility & Accountability
   Wealth Managers proffering
    Equity & Debt instruments
   Dedicated sales team
    representing high value assets
                                       Opportunities
   Advertising & PR by builders &
                                          Convenience of one stop shop for
    marketers
                                           real estate needs
                                          Advice rather than push
                                          Broaden the horizon to look at
                                           new emerging opportunities like
                                           equity involvement
                                          Wealth Management perspective
                   NRI : Secondary Target
Products                             Needs
   Vacation Home                      High Service Quality
   Equity investment in               Large portfolio of options
    Commercial , Hotel Real Estate     Customized Advisory
    Development                        Relationship Building
                                       Credibility & Accountability
Competitive Landscape
   Wealth Managers proffering
    Equity & Debt instruments
                                     Opportunities
   Dedicated sales team
                                        Convenience of one stop shop for
    representing high value assets
                                         real estate needs
                                        Advice rather than push
                                        Broaden the horizon to look at
                                         new emerging opportunities like
                                         equity involvement
                                        Reach to micro-segments
                         Key Success Factors
   Direct Selling & Marketing for HNIs, NRIs
        Dedicated sales and service team for HNIs / NRIs
        Dedicated processes and systems to manage service & sales issues
        Dedicated telemarketing & call centre support


   Direct marketing strategy comprising of internet marketing and
    other channels

   Pioneering new and exciting initiatives
        Example :Halfshare.com specializes in the shared ownership of luxury
         vacation properties throughout North America.
             They help buyers find their ideal vacation property or Vacation Home while matching
              them with the right co-owner through a Buyer Match Plan
                       Key Success Factors
   Continuous inventory acquisition by a dedicated team
       Dedicated team to scout for projects under development, completed
        projects, re-sale inventory
       Acquisition could be followed by
            Re-packaging the real estate to make it more appealing to the target buyer


   Sound Real Estate Knowledge Base
       Ability to track trends and assess impact for HNIs
       Ability to give a wealth management perspective and offer

   Good Service Quality
       Training & People development to offer good service experience
       Personalized service to HNIs/NRIs
       Robust processes for transaction management
       Strong performance management system
   Opportunity


   Development and Asset Management


   NRI & HNI : Vacation Home s


   Middle Class : Sales & Marketing


   Conclusions
       Sales & Marketing to Middle Class
   Customers : Middle class

   Initial value proposition
      Good Deal & Good Service Quality


   Sustainable value proposition
      Distribution channel
      Width and depth
      One stop shop
      Good Deal
      Service Quality
Differentiated Distribution Strategy

 Development Potential



                                                            Full Fledged
                         High


                                           Franchisee
                                                         Company Operations
                         Average / Low




                                                         Company Operations
                                           Franchisee
                                                            + Franchisee




                                         Average / Low         High

                                              Purchasing Power
                        Benefits to Franchisees
   Business Support
        Business Operations Manual
        Exciting Inventory & Inventory Management Software
        Experienced Management & Franchise Advisory System
        Referral& Lead Management System
        New Business Generation
        Performance Monitor
        Staff Recruitment Assistance Programme
        Regional Managers and Franchise Operations Centres

   Effective Marketing Mix
        Advertising & Public Relations
        After Sales Service
        Regional Marketing Programme
        Branded Promotional Merchandising, Brochures etc
        Loyalty Card Programme

   Personal Business Development
        Comprehensive Introductory Programme
        Comprehensive Sales Training Programme
        Field Support
        Recognition Groups for Outstanding Achievers
        Software Support & Training
Distribution Development Plan


   Amritsar           Chandigarh
     Ludhiana
                            Dehradun
         Gurgaon       Delhi
                                                 Siliguri     Guwahati
           Jaipur                Lucknow

   Ahmedabad
                   Indore
                                          Ranchi
         Vadodara    Nagpur                  Kolkata
                                 Raipur
     Mumbai                               Bhubaneswar
          Pune      Secunderabad       Vizag

            Hyderabad        Vijayawada
          Hubli
   Goa
            Bangalore
                            Chennai         ● Primarily Branches
     Mysore                                 ● Franchisee + Branches
                 Coimbatore                 ● Franchisee Only
         Kochi


          Thiruvanantpuram
                    Key Success Factors
   Wide Reach to Increase Convenience & Access
       Branch network in class A cities
       Branch offices in strong NRI markets
       Extensive network of agents & franchisees on a win-win model


   Wide Choice to Facilitate a One Stop Shop Experience
       Continuous inventory acquisition by a dedicated team
       Effective Tie-Ups & Alliances to offer complementary & supplementary
        services
       Incentivizing the network to add inventory
       Effective inventory management software and systems
       Attractive inventory display & merchandising
                       Key Success Factors

   Good Service Quality
           Training & People development to offer good service experience
           Effective systems for inventory management
           Effective software and systems for CRM
           Robust processes for transaction management
           Strong performance management system
   Continuous inventory acquisition by a dedicated team
           Dedicated team to scout for projects under development, completed projects, re-sale
            inventory
           Acquisition could be followed by
                Re-packaging the real estate to make it more appealing to the target buyer
                Small value additions to make the inventory more valuable
           Exclusive marketing and sales rights to add to distribution power
   Incentivizing the network to add inventory
           Win-Win model for agents/franchisees to populate the site with inventory
           Outsourcing of inventory acquisition to agents/franchisees in areas with low
            development potential and/or low purchasing power
                       Key Success Factors
   Integrated Software
       A low cost suite of an easy-to-use integrated software systems
       Cover every key aspect of successful real estate agency practice
       Full technical and training support supplied by the team at Technology.
       Software system has a database, lead management , activity scheduler,
        diary and presentations package designed to create efficiency, lift sales
        and allow accountability in the office
       Software system are fully integrated.
            This means that data only needs to be entered once. It is then available for
             use in all modules of the system
   Opportunity


   Development and Asset Management


   NRI & HNI : Vacation Home s


   Middle Class : Sales & Marketing


   Conclusions
            Differentiation vs. Returns
                                       Vacation
High
                                   Home/Retiremen
Differentiation
                                      t & Other
                                     Specialized
                                      Concepts


                     Asset                          Development
Average
Differentiation   Management



                  Middle Class :
Low
Differentiation      Sales &
                   Marketing


                    Immediate        Medium Term      Long Term
                     Returns           Returns         Returns
SOUNDS INTERESTING ?
            Call Master Sun Consulting
            www.mastersungroup.com
Mobile : +91 9920803060
Email : sarvajeet@strategyexecution.in

				
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