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Phemey Pon
The economy…
The key to managing crisis…
Is to keep an eye on the long term...
While you are dancing in the flames.
Chairman of Royal Bank of ScotlandSir Philip Hampton
(1)
We are the worst…
Morgan Stanley
Drop by 78%
$89 @14Jun 2007
$20 @16Feb 2009
Goldman Sach
Drop by 65%
$248 @31Oct 2007
$86 @16Feb 2009
CBRE
$41.3 @9Jul 2007
$3.3 @16Feb 2009
Drop by 92%
DTZ
Drop by 96%
$835 @25Dec 2006
$35 @16Feb 2009
Despite the economy…
(2)
Property funds investing in China
How property deals are evaluated?
Evaluate by IRR, Why?
Begin with an end in mind
Sequences of events planned
- when to renovate, refinance & exit
Objective comparison made possible
=>
Initial cash accumulate annually @17%
IRR from first principle
IRR & financial engineering
IRR - 100% equity must attractive
then enhanced by:
-short holding period
-high gearing
-quick refinancing
-vendor financing
Asset Management enhancement
office building of 60,000 sf
Upon acquisitionUnit rent pm = $5.6 + $4.4 =$10Unit rent pa = $120Unit CV at 4% return =$3,000
24 months after asset mgt
IRR=110%
Unit rent pm = 12+8.8+5 =$25.8Unit rent pa = $309.6Unit CV at 5% return =$6,192
Asset Management Proposal
rental goal
Proposed Rental Goal
Average unit rent
Year
Average unit rent
Year
% Increase over previous year
Breakdowns
Repositioning
Skillful neg & lease admin
4
92
5
1 3
$1 av. rent increase
($1 x 80,000 x 12) / 5%
$20M value increaseAttention to every $1 av. rent
What’s in it for you?
Opportunities of
Mainland property developers
What’s in it for you?
Opportunities in
Saigon of Vietnam
19 Aug 2007
25 Aug 2007
Marketing materials to media
成功饮越南头啖汤
1. Why Saigon now?
2. What strategies we use?
3. What have we done successfully?
Why Saigon now?
Shanghai of China
Saigon of Vietnam
Shanghai 10 years ago
人均GDP $2,200
1995 2006 =
GDP Growth 2001-2007
11%
1
2
Govt welcome foreign investment
Strong demand on office
Total stock = 350,000 m2
1
2
1
0% vacancy
Strong demand on hotel
7,700 rooms only
50% of Hong Kong rates
Need 20,000 new rooms in 2011
Strong demand on serviced apartment
2,500 units
LongWaiting list
Best timing
Jan 2007
头啖汤
What strategies we use?
•土储资产增值 –长棍
•项目现金收入 –短棍
Profit
Price – GDP growthCost - Inflation
7000 7600 8300 90009900 10700
1170012800
1400015200
3800 4142 45154291 5364
8253
58476373
69477572
2500 2650 2809 2978 31563346 3546 3759 3985 4224
土储资产增值 -长棍
10% 30% 60%
15亿
57亿
149亿83亿
35亿
10亿
半亿3亿 半亿
投1亿前期,球场,专业费
土地面积 100公顷楼面地价 HK$100 psm总地价 1亿
610
3
10% 30% 60%
3亿
66亿
22亿5亿
NPV @ 6% = 46亿
半亿半亿
IRR = 56%
4亿 => 46亿
DCF valuation magic
• Selling price = USD2,500
• AV=USD500 Bldg Cost=USD750
• Profit Margin = 50%
• IRR (full equity) ≈ 25%
项目现金收入 –短棍 - Deal in CBD
What have we done successfully?
CBD
土储资产增值 –长棍
土地面积=1,350万m2
20,000亩
项目现金收入 – Deals in CBD –短棍
What’s in it for you?
(3)
www.sethgodin.com
Content – domain knowledge
• People you know
• Skills you’ve developed
Process – emotional intelligence skill
• Visualizing success
• Persuading other people of your point of view
• Managing projects
Process – emotional intelligence skill
• As the world changes ever faster
• As industries shrinks & others grow
• Process ability is priceless
Communication skills
• Public speaking
• Presentation
Communication skills
• Public speaking
• Presentation
http://speaking.alltop.com
Q & A before Conclusion
The economy…
Your mental view…
“Success always comes when preparation meets opportunity”
Henry Hartman