Rpcon masterclass s202-benchmark-and-reporting-standards - lee trevena
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Transcript of Rpcon masterclass s202-benchmark-and-reporting-standards - lee trevena
![Page 1: Rpcon masterclass s202-benchmark-and-reporting-standards - lee trevena](https://reader034.fdocuments.in/reader034/viewer/2022051611/54b5c0e94a7959fd248b4581/html5/thumbnails/1.jpg)
Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Presented by: Lee Trevena
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Session Overview
• Measuring Occupancy Cost• Preparing a Tenancy Schedule• Tracking Critical Dates• Portfolio Performance Analysis • Portfolio Profiling & Benchmarking• Preparing for Portfolio Reviews• IFRS & FASB13 Reporting• Budgeting and Forecasting • Percentage Rent Tracking
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
• NeedThe boss says so
Finance pay the money
Leasing guy asked for it
I want to keep my job
• WantHave we got this information?
What do we know about the portfolio?
• Compete Better information equals better outcomes
Monetize Administration
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Measuring Occupancy Cost
• How do we measure it?
Annualised Per Annum Dollar ($APA)
APA / MAT
Annualised Per Metre Dollar ($APM)
Total Per Annum Dollar ($TPA)
TPA / MAT
Annual Variance(s)
Total Monthly Cost (cashflow)
IFRS – Straight Line
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Measuring Occupancy Cost
• What does it represent?
The cost of being in that property – of course!
Actual or Effective
• What should it include?
Promo Levy?
Rental Credits & Rebates?
Percentage Rent?
Statutory Charges?
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Measuring Occupancy Cost
• Why do we measure it?
True cost of occupancy
Track cash flow in the business
Affordability at renewal
Benchmark comparisons
To speak ‘Landlord’
Measure Property Performance
Rate Staff Performance
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Measuring Occupancy Cost
YEARS RENTAL
YR 5 $182,326
YR 4 $173,644
YR 3 $165,375
YR 2 $157,500
YR 1 $150,000
SALESAPATPAVAR
5
-25.0% 0.0% -16.7% 0.0%
50% Rent Abatement
1 2 3 4
0.0%
15.0%11.3%
14.7% 14.4% 15.8% 16.3%14.7% 14.4% 13.2% 16.3%
Rent Free
$1,000,000 $1,070,000 $1,150,000 $1,100,000 $1,120,000
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Preparing a Tenancy Schedule
• Spreadsheet or System?
• Simple Lease Abstract
• What do you include
Simple Example
Complex Example
• Do an Excel Course?
• Tenancy Schedule are so 80s!
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Tracking Critical Dates
• Which Dates?
Lease Start/Expiry
Rent/Charge Adjustments
Option Exercise Dates
Accounting Periods
Insurance Renewals
Compliance Dates
Notification Dates
Clause Dates – Co-Tenancy, Rebate, Make Good
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Tracking Critical Dates
• How do we set them up?Excel – very quiet
Outlook – very private
System – proactive and collaborative
• How do you update them?Manual or Automatic
• Key Tips1. Don’t EVER track dates solo
2. Memories are not accurate
3. Read clauses carefully
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Portfolio Performance Analysis• Sales Productivity
Sales per unit of floorspaceHow hard is our real estate working
• Occupancy CostsRent + whateverAnnual variances in variable charges
• Over-trades Not maximising potential salesLarger premises or additional site
• Under-tradesOperations alertTenancy too big
• Security of IncomeExpiries & HoldoversRenewal Program
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Portfolio Performance Analysis• Property Dept. Performance
Site Selection – Forecast Sales vs Actual Sales
Network Planning – Increased Sales & Disposals
Security – % of portfolio exposed
Deal Negotiation – Forecast Renewals vs Lease Deal
Lease Administration – Doc Execution
Lease Audit – Savings from Errors
Legal – Successful clause negotiations
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Portfolio Profiling & Benchmarking
• Organic analysis – analyst?• Business management• Trend identification• Decision support – role?• Landlord negotiations• Franchisee negotiations• Compliance• Business protection
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Portfolio Profiling & Benchmarking• Portfolio – define the group
Group of Stores – i.e. Westfield, CBD, Rural
• Profiling – choose your dataStore Size
Performance Metrics
Geography
Ownership
• Benchmarking – setting standardsWhat is a good number?
Are there applicable influences or responses?
IF, THEN ELSE
Getting business buy-in
Source of intelligence
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Preparing for Portfolio Reviews
• Collect the information early• Work with deal maker• Current, trends & forecasts• Benchmark Your Landlords• Strategise Over-trades and Under-trades• Make the information manageable• Have a strategy• Know your position• Don’t blink
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• NOW = Straight lining of Rent
Known Factors
Rent
Incentives
Some Reviews – not CPI
Not % Rent
Periodically Updated
Variance to AGAPP is key
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• FUTURE = Capital LeasesLiability Value
Asset Value
Amortisation
Depreciation / Interest
Rate - WACC
Asset Adjusted Differently to Liability
NPV is very complex
High degree of Assumption
Periodically Updated
RENTAL
REVIEWS
TERM
OPTIONS
INTELLIGENCE
INCENTIVE
MAKE GOOD
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
IFRS & FASB 13 Reporting
• Its coming quicker than you think
Likely 31st December 2015
Yr 1 Comparison – 1st Jan 2015
Yr 2 Comparison – 1st Jan 2014
18 months away!
Compare to Y2K timeframe
HUGE information request
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
FASB13IS COMING
Benchmark & Reporting Standards
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Budgeting & Forecasting
• What is a budget?
When and how long does it take?
• What is a forecast?When and for how long does it take?
Accuracy
Multi-format (AGAPP, AIFRS)
Becoming more complex
Existing 12 month cash flow
Reviews Expiries and Expiries
Percentage Rent
Outgoings, Promos, Electricity
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Percentage Rent Tracking
• Key part of Accruals Tracking
• Accounting Periods are critical
• How close to threshold are we?
• Is it a fix or scaled threshold?
• Once YTD sales are ready each month prepare
• Benchmarking
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Lease Administration Masterclass Friday, 23rd March 2012Lease Administration Masterclass Friday, 23rd March 2012
Benchmark & Reporting Standards
Thank you!
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