Indian Real Estate One Stop Shop- Concept Note

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Master Sun Consulting – Business Opportunity Evaluation : 

Master Sun Consulting – Business Opportunity Evaluation Need for One-Stop Shop in Real Estate

Slide 2: 

Opportunity Development and Asset Management NRI & HNI : Vacation Home s Middle Class : Sales & Marketing Conclusions

Opportunity : 

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 : 

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 Rich Middle Class Bottom of the pyramid

Slide 5: 

Opportunity Development and Asset Management NRI & HNI : Vacation Home s Middle Class : Sales & Marketing Conclusions

Land Development – Value Chain : 

Land 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

Land Development Process : 

Land Development Process Market research Design brief World class architects Design and concept Modelling and forecasting Marketing plan Business plan Fundraising agent Fundraising Project management Construction Sales and marketing Asset management Realisation PRE-CONSTRUCTION Detailed plans Building approvals Financial analysis Self Outsourced

Development Snapshot : 

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 : 

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 : 

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 MethodologyDesign Brief : 

Development MethodologyDesign 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 : 

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 : 

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 : 

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)

Slide 15: 

Opportunity Development and Asset Management NRI & HNI : Vacation Homes Middle Class : Sales & Marketing Conclusions

Slide 16: 

Live your Dreams

Understanding – Vacation Home : 

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 Understanding – Vacation Home

International Demand Drivers : 

International Demand Drivers Economy Population Propensity to spend Income Levels Rate of borrowing Growth rate Attracting investment Government Initiatives Conferences Baby Boomers Interest Rates Key movers of the Vacation Home market Tourism

Vacation Homes-Internationally : 

Vacation Homes-Internationally Source: National Association Of Realtors 2006 Tennis 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

Vacation Home Buyers: Internationally : 

Vacation Home Buyers: Internationally Distances between residence & Vacation Home Usually less than 100 miles Size of home : 1000-1500 sqf Average value per sq.ft Source: Economic Realtors Research

US 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.S Along with high growth rates comes heightened competition Brands would soon start at exploiting other geographies 0.05 % 0.08 % 0.10 % US Vacation Home Market

India Vacation Home : 

Given the current economic trends we can draw the following hypothesis: - The Size of the Vacation Home industry is approximately US$ 0.757 billion or INR 34,150 Crore Experts predict the GDP growth rate to be close to 8%, the same would see a rise in income levels – 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 0.05 % 0.08 % 0.10 % India Vacation Home

Indian Luxury Consumer: HNI : 

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

Affluent Map Of India : 

Affluent Map Of India Predominantly luxury consumers are resided in the north and west of the country Source: Technopark

Vacation Home : Snapshot : 

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 : 

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

NRI : Secondary Target : 

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

Key Success Factors : 

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 : 

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

Slide 30: 

Live your Dreams

Slide 31: 

Opportunity Development and Asset Management NRI & HNI : Vacation Home s Middle Class : Sales & Marketing Conclusions

Sales & Marketing to Middle Class : 

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 : 

Differentiated Distribution Strategy Franchisee Full Fledged Company Operations Franchisee Company Operations + Franchisee Average / Low High High Average / Low Purchasing Power Development Potential

Benefits to Franchisees : 

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 : 

Goa Chandigarh Gurgaon Delhi Secunderabad Vizag Vijayawada Ahmedabad Bangalore Chennai Hyderabad Mysore Bhubaneswar Lucknow Vadodara Ranchi Kochi Thiruvanantpuram Hubli Mumbai Indore Jaipur Kolkata Siliguri Raipur Pune Coimbatore Primarily Branches Franchisee + Branches Franchisee Only Dehradun Nagpur Guwahati Amritsar Ludhiana Distribution Development Plan

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

Key Success Factors : 

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 : 

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

Slide 39: 

Opportunity Development and Asset Management NRI & HNI : Vacation Home s Middle Class : Sales & Marketing Conclusions

Differentiation vs. Returns : 

Differentiation vs. Returns

Sounds interesting ? : 

Sounds interesting ?

Call Master Sun Consultingwww.mastersungroup.com : 

Call Master Sun Consultingwww.mastersungroup.com Mobile : +91  9920803060 Email : sarvajeet@strategyexecution.in

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