Real Estate Supermarket
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Transcript of Real Estate Supermarket
+
Business Opportunity Business Opportunity EvaluationEvaluationNeed for One-Stop Shop in Real Estate
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+ Opportunity
Development and Asset Management
NRI & HNI : Vacation Home s
Middle Class : Sales & Marketing
Conclusions
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+ OpportunityOpportunity
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
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+Target Consumers
1.6 million luxury consumers 6-7 million very affluent 9-10 mid affluent 11-12 million mass affluent
40 million upper middle class 72 million up graders
140 million bottom of the pyramid
Urban Population
50%40%
10%
Bottom of the pyramid Middle Class Rich
Rich
Middle Class
Bottom of the pyramid
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+ Opportunity
Development and Asset Management
NRI & HNI : Vacation Home s
Middle Class : Sales & Marketing
Conclusions
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+ Land Development – Value ChainLand Development – Value Chain
Vacant Land
Developable Land
Pre-construction Land
Completed Project
Value (example)
Rs 50 Cr
Rs 200 Cr
Rs 250 Cr
Rs 1000 Cr
Concept, plans, approvals, financial
models, business plans etc
Infrastructure (if required)
Construction finance, Contractors, Project
Management, pre-sales
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+Land Development ProcessMarket
research Design brief
World classarchitects Design and concept
Modelling and
forecastingMarketing
plan Business plan
Fundraising agent Fundraising
Project manageme
ntConstruction
Sales and marketing
Asset manageme
ntRealisation
PRE-CON
STRUCTIO
N
Detailed plans
Building approvals
Financial analysis
Self Outsourced
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+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
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+ Development Methodology Pre-Construction Financial analysisFinancial analysis
What options are there and which is most profitable?What options are there and which is most profitable? Benefits of doing this are Benefits of doing this are
Differentiated product – able to sell your product in a crowded Differentiated product – able to sell your product in a crowded marketmarket
Delivering what the market wants = building a brandDelivering what the market wants = building a brand Price premium and faster sales ratesPrice premium and faster sales rates = more profit and less risk= more profit and less risk
Then, translating this concept into a site plan and designThen, translating this concept into a site plan and design A collaborative effort between Promoters, we and panel A collaborative effort between Promoters, we and panel
architects.architects.
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+Development Methodology Business Plan BUSINESS PLAN = Who is going to do what to make this BUSINESS PLAN = Who is going to do what to make this
project work?project work? How are we intending to SELL what we build? How are we intending to SELL what we build? Who will construct it?Who will construct it? Who will oversee construction?Who will oversee construction? What is the operational and marketing plan?What is the operational and marketing plan? How much money do we expect to make and what funds do How much money do we expect to make and what funds do
we require?we require? How will we manage the risks of the project?How will we manage the risks of the project?
Requires decisions on branding and marketing strategy.Requires decisions on branding and marketing strategy. Need full business plan in order to proceed to Need full business plan in order to proceed to
fundraising .fundraising .
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+Development MethodologyDesign Brief NOT “what can I build?” but “what can I sell?”NOT “what can I build?” but “what can I sell?” DESIGN BRIEF = What are you going to build and why?DESIGN BRIEF = What are you going to build and why? Market researchMarket research
Not just a matter of ordering a report, it needs to be properly analysedNot 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 Need to consider the potential audience for the development and how to reach them.reach them. Need to understand market depth and likely acceptance of conceptNeed to understand market depth and likely acceptance of concept Need hard data (market research) and soft data (customer research)Need hard data (market research) and soft data (customer research) Need to identify price points, user preferences, demographics, competitive Need to identify price points, user preferences, demographics, competitive analysis, required features, value drivers etc.analysis, required features, value drivers etc.
Financial analysisFinancial analysis What options are there and which is most profitable?What options are there and which is most profitable?
Benefits of doing this are Benefits of doing this are Differentiated product – able to sell your product in a crowded marketDifferentiated product – able to sell your product in a crowded market Delivering what the market wants = building a brandDelivering what the market wants = building a brand Price premium and faster sales ratesPrice premium and faster sales rates = more profit and less risk= more profit and less risk
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Development Methodology Construction & After As your development partner, we will provide services as required As your development partner, we will provide services as required
during the construction and asset management / exit phases.during the construction and asset management / exit phases. These may include any of the following:These may include any of the following:
Project management services (quality, cost control, timeliness)Project management services (quality, cost control, timeliness) Asset management services (retail mall, hotels, golf course maintenance Asset management services (retail mall, hotels, golf course maintenance
etc)etc) Non-executive project management servicesNon-executive project management services Development of exit routes / sales strategies to maximise the return to Development of exit routes / sales strategies to maximise the return to
PromotersPromoters
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+ 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
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+ Asset Management : Role
The asset manager provides the following major services. This is not The asset manager provides the following major services. This is not an exhaustive list. an exhaustive list. Maximises the overall profitability of site.Maximises the overall profitability of site. Analysis, options and recommendations to owner for decisions to be made by themAnalysis, options and recommendations to owner for decisions to be made by them Implementation to achieve the objectives and decisions of ownerImplementation to achieve the objectives and decisions of owner As required decisions for the general manager and management team based on those As required decisions for the general manager and management team based on those
objectivesobjectives Ensures that the strategy is converted to tactics and implemented with changes as Ensures that the strategy is converted to tactics and implemented with changes as
requiredrequired Looks at each Area of Operations (see above list) and look for efficiencies, improvements, Looks at each Area of Operations (see above list) and look for efficiencies, improvements,
structure, operations and quality structure, operations and quality Create Standard Operating Procedures to capture hotel policy on standards, quality, Create Standard Operating Procedures to capture hotel policy on standards, quality,
performance measurementsperformance measurements Leads creation of operating budgets, capex priorities, recommendations and Leads creation of operating budgets, capex priorities, recommendations and
implementationimplementation Builds management team including hiring, reshaping and firing of senior staff, setting Builds management team including hiring, reshaping and firing of senior staff, setting
objectives, performance reviews and bonuses.objectives, performance reviews and bonuses. Ensure non-financial objectives are achieved (eg quality, social justice programs, PR etc)Ensure non-financial objectives are achieved (eg quality, social justice programs, PR etc)
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+ Opportunity
Development and Asset Management
NRI & HNI : Vacation Homes
Middle Class : Sales & Marketing
Conclusions
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+Understanding – Vacation Home Understanding – Vacation Home
Segmentation of Vacation Home market internationally Segmentation of Vacation Home market internationally
Vacation Ownership Property owned generally for personal use
Timeshare A timeshare is a form of vacation property ownership. The use and costs of running the resort are shared among the owners
Vacation Rentals
Renting out a furnished apartment or house on a temporary basis to tourists as an alternative to a hotel
Vacation Exchange
You trade your interval or week for new and different vacation experiences at comparable resorts across the country and around the world
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International International Demand DriversDemand Drivers
Economy Economy
PopulationPopulation
Propensity to spend Propensity to spend
Income Levels Income Levels
Rate of borrowing Rate of borrowing
Growth rate Growth rate
Attracting investmentAttracting investment
Government Initiatives Government Initiatives
ConferencesConferences
Baby Boomers
Interest Rates
Key movers of the Vacation Home market
Tourism
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+Vacation Homes-Internationally Vacation Homes-Internationally
Source: National Association Of Realtors 2006
Desirable Attributes In A Vacation Home
38%
22%
22%
18%
Close To Ocean/Lake/River Sporting Activities Close To Resort Ares Mountains/Natural Destinations
Leisure Activities Preferred
29%
20%16%
11%
10%
9% 5%
Water Sports Boating Hunting/Fishing Golf Biking/Hiking Skiing Tennis
TennisMode Of Purchase For A Vacation Home
68%
18%
14%
Real Estate Owners Builders
Golf
Key Learning's: Internationally activities are critical aspects of Vacation Homes Brokers / real estate agents play a critical role as channel partners Locational advantage needs to be broadcast for each individual property
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+Vacation Home Buyers: Vacation Home Buyers: InternationallyInternationallyDistance (Miles) Vacation Home % Investment Property %
25 44 6925-99 19 9
100-199 22 5200-499 1 *500-999 3 3
1000-1499 * 61500 and more 10 8Median Distance 49 18
* Less than 1 %
Home Size (Sq.ft) Vacation Home % Investment Property %500 4 1
501-1000 14 141001-1500 56 221501-2000 11 312001-2500 9 122501-3000 5 10
3000 and more 1 10Median Size 1290 1700
Format California Coastal South Florida Golf Destinations Ski DestinationsStudio 600 600 700 NA1 BDR 590 600 550 5502 BDR 480 600 450 5803 BDR NA NA 400 600
Premiums ($ 000) 50-150 50-300 50-150 50-100
Distances between residence & Vacation HomeUsually less than 100 miles
Size of home : 1000-1500 sqf
Average value per sq.ft
Source: Economic Realtors Research
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US Vacation Home MarketUS Vacation Home Market
International Vacation Home market is maturing and seeing considerable growth
The US$ 13 billion Vacation Home industry in US is 0.10% of GDP as of 2005
Multiple players having unlimited product offerings
GDP of US playing an integral role for burst of Vacation Home industry
Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.SAlong with high growth rates comes heightened competition Brands would soon start at exploiting other geographies
0.05 %
0.08 %
0.10 %
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India Vacation Home India Vacation Home
Given the current economic Given the current economic trends we can draw the trends we can draw the following hypothesis:following hypothesis:
- The Size of the Vacation Home - The Size of the Vacation Home industry is approximately US$ industry is approximately US$ 0.757 billion or INR 34,150 0.757 billion or INR 34,150 Crore Crore
Experts predict the GDP growth Experts predict the GDP growth rate to be close to 8%, the same rate to be close to 8%, the same would see a rise in income would see a rise in income levels – A factor which is one of levels – A factor which is one of the key growth drivers the key growth drivers • Generation X will boost the growth of Vacation Homes in India
•India the next growth driver for international companies
0.05 %
0.08 %
0.10 %
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+
Disposable income 9 lac p.a
Owns D/E segment car
Residing in posh localities
Average age = 36-40
CWE= Mostly Male
Married and has kids
42% live in joint families
35% of wives working
44% traveling abroad for vacation, at least once a year
Indian Luxury Consumer: HNI
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Affluent Map Of India Predominantly luxury
consumers are resided in the north and west of the country
Source: Technopark
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+ 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
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+ Indian HNI : Primary Target
Products
Vacation Home
Purchase/Lease of Commercial
Investment in Real Estate Funds/ REITs
Competitive Landscape
Wealth Managers proffering Equity & Debt instruments
Dedicated sales team representing high value assets
Advertising & PR by builders & marketers
Needs
Prestige, Ego Value
High Service Quality
Large portfolio of options
Customized Advisory
Relationship Building
Credibility & Accountability
Opportunities
Convenience of one stop shop for real estate needs
Advice rather than push
Broaden the horizon to look at new emerging opportunities like equity involvement
Wealth Management perspective
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+NRI : Secondary Target
Products Vacation Home
Equity investment in Commercial , Hotel Real Estate Development
Competitive Landscape Wealth Managers proffering
Equity & Debt instruments
Dedicated sales team representing high value assets
Needs
High Service Quality
Large portfolio of options
Customized Advisory
Relationship Building
Credibility & Accountability
Opportunities
Convenience of one stop shop for real estate needs
Advice rather than push
Broaden the horizon to look at new emerging opportunities like equity involvement
Reach to micro-segments
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+ Key Success Factors
Direct Selling & Marketing for HNIs, NRIs Direct Selling & Marketing for HNIs, NRIs Dedicated sales and service team for HNIs / NRIsDedicated sales and service team for HNIs / NRIs Dedicated processes and systems to manage service & sales issuesDedicated processes and systems to manage service & sales issues Dedicated telemarketing & call centre supportDedicated telemarketing & call centre support
Direct marketing strategy comprising of internet marketing and other channelsDirect marketing strategy comprising of internet marketing and other channels
Pioneering new and exciting initiativesPioneering new and exciting initiatives Example :Halfshare.com specializes in the shared ownership of luxury vacation Example :Halfshare.com specializes in the shared ownership of luxury vacation
properties throughout North America. properties throughout North America. They help buyers find their ideal vacation property or Vacation Home while matching them with the right They help buyers find their ideal vacation property or Vacation Home while matching them with the right
co-owner through a Buyer Match Planco-owner through a Buyer Match Plan
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+
Key Success FactorsKey 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
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+ Opportunity
Development and Asset Management
NRI & HNI : Vacation Home s
Middle Class : Sales & Marketing
Conclusions
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+ 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
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+ Differentiated Distribution StrategyDifferentiated Distribution Strategy
Franchisee Full Fledged Company Operations
Franchisee Company Operations+ Franchisee
Aver
age
/ Low
Aver
age
/ Low
HighHigh
Hig
hH
igh
Average / LowAverage / Low
Purchasing Power
Dev
elop
men
t Po
tent
ial
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+ Benefits to FranchiseesBenefits 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
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+
Goa
Chandigarh
Gurgaon Delhi
Secunderabad Vizag
Vijayawada
Ahmedabad
BangaloreChennai
Hyderabad
Mysore
Bhubaneswar
Lucknow
VadodaraRanchi
Kochi
Thiruvanantpuram
Hubli
Mumbai
Indore
Jaipur
Kolkata
Siliguri
Raipur
Pune
Coimbatore
● Primarily BranchesPrimarily Branches● Franchisee + Franchisee + BranchesBranches● Franchisee OnlyFranchisee Only
Dehradun
Nagpur
Guwahati
AmritsarLudhiana
Distribution Development PlanDistribution Development Plan
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+
Key Success Factors 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
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+ Key Success FactorsKey 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
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+
Key Success FactorsKey Success Factors Integrated SoftwareIntegrated Software
A low cost suite of an easy-to-use integrated software systems A low cost suite of an easy-to-use integrated software systems Cover every key aspect of successful real estate agency Cover every key aspect of successful real estate agency
practicepractice Full technical and training support supplied by the team at Full technical and training support supplied by the team at
Technology. Technology. Software system has a database, lead management , activity Software system has a database, lead management , activity
scheduler, diary and presentations package designed to scheduler, diary and presentations package designed to create efficiency, lift sales and allow accountability in the create efficiency, lift sales and allow accountability in the officeoffice
Software system are fully integrated. Software system are fully integrated. This means that data only needs to be entered once. It is This means that data only needs to be entered once. It is
then available for use in all modules of the system then available for use in all modules of the system
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+ Opportunity
Development and Asset Management
NRI & HNI : Vacation Home s
Middle Class : Sales & Marketing
Conclusions
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+Differentiation vs. ReturnsHigh Differentiation
Vacation Home/
Retirement & Other
Specialized Concepts
Average Differentiation
Asset Management
Development
Low Differentiation
Middle Class : Sales &
Marketing
Immediate Returns
Medium TermReturns
Long TermReturns
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+Sounds interesting ?
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+ Contact Us
Sarvajeet Chandra
¥ +91 9920803060,[email protected]
Visit Us at www.mastersungroup.com