OPERATIONAL EXCELLENCE Susanne Blomberg, Chief Sales & Marketing Officer Johan Ellertson, Head of Project Department
OPERATIONAL EXCELLENCE Acquisition Sales Purchasing SSM Concept
Affordable & space efficient apartments Property management Investment sourcing 1 7 Handover & property management 8 2 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
SSM S HOUSING DEVELOPMENT PROCESS CLEAR TOLLGATES = BETTER COST CONTROL Investment sourcing Project development Design Apartment sales Divestment to cooperative association Construction 1 2 3 4 5 6 Handover & property management 7 8 Internal memorandum Internal memorandum Internal memorandum Internal memorandum
Affordable & space efficient apartments INVESTMENT SOURCING Investment sourcing 7 Handover & property management Property management 8 1 2 1 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
CLEARLY DEFINED INVESTMENT CRITERIA Urban environment Close to public transport Affordable housing costs
KEY MUNICIPALITIES OUR GEOGRAPHIC MARKETS
PORTFOLIO IN URBAN AREAS CLOSE TO CITY CENTER & PUBLIC TRANSPORT 26 27 28 29 30 33 25 32 31 Completed projects 34 1 37 38 39 35 36 Project under development or construction Cooperative apartments 2 5 3 20 6-40 14 10 48 41-21 23 22 43 44 45 19 45 13-13 15-18 46-47 Rental apartments Student housing 24
SUCCESSFUL MULTI-CHANNEL ACQUISITION STRATEGY Private property owners Municipalities Off market Direct negotiations 66% of portfolio Direct land allotments 22% of portfolio 88% Auction process Opportunities from brokers 6% of portfolio Land allotments via competitions 6% of portfolio 12% Split based on portfolio as per November 15, 2017.
LONG-TERM SUCCESSFUL TRACK RECORD OF STRATEGIC COLLABORATIONS WITH JV PARTNERS Current projects, no. of apartments LIBU Invest STUDENT HILL Tellus Towers 1,200 The Lab 266 Turbinhallen 205 Elverket i Nacka 393 The Loft 120 Järla Station 319 West Side Solna 253 Bromma Square 400 Tentafabriken 72 Metronomen 188 Financial Building rights
BUSINESS ARENA MIPIM ALMEDALEN
Affordable Affordable and efficiently & space efficient planned apartments apartments PROJECT DEVELOPMENT Investment sourcing 7 Handover & property management Property management 8 1 2 2 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
MOST SSM EMPLOYEES PART OF PROJECT ORGANIZATION Department Manager Project Managers Department Manager Project Managers Department Manager Project Managers HR 2 people Legal Counsel 1 person Comm & IR 1 person Procurement 4 people Business Development 5 people Sales & Marketing 7 people Finance 4 people
PROJECT ORGANIZATION Division Manager Project Manager Site Manager Chief Planner Construction Manager Construction Manager Construction Manager ~ 20 sub-contractors 10 with framework agreements
OPTIMAL PRODUCT THROUGH BEST-IN-CLASS PROJECT MANAGEMENT Customer focused Right quality Delivered on time Within budget
INITIAL PHASE OF SSM CONCEPT CITY PLAN Discuss key issues with municipality Present short version of SSM Concept Target group Product Commercial areas Social integration Environment
CLEARLY DEFINED CONCEPT & PROCESS FACILITATE DEVELOPMENT PHASE City plan process 6-12 months 3 months 1 months 1 months 3 months Initial filing Consultation Review Approval Legally binding Legally binding City plan Building permit
CONCEPT DEVELOPMENT Maximize value of investment by developing and planning concept Work with architects to specify concept and draw up plans Long-standing relationships with key architects and specialists Strategic partners
SUSTAINABLE CONSTRUCTION PROCESS IN LINE WITH SILVER CERTIFICATION* Materials Construction Product Follow Basta system Focus on recycling Sustainable homes * The Sweden Green Building Council
Affordable Affordable and efficiently & space efficient planned apartments apartments DESIGN Investment sourcing 7 Handover & property management Property management 8 1 2 3 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
BENEFITS OF SSM CONCEPT Concept Provides stability to budgeting and purchasing processes The SSM Concept reduces the risk of exceeding fixed costs that 70-75% of the time relate to foundations, frames and installations. Plan for sales material developed SSM plans and executes projects based on the needs of tomorrow s urbanites. Functionality Space efficiency Functionality per m2
THE SSM CONCEPT Construction description Concept Room description Installation description Installation description Construction description Room description Detailed description of interior design Available design options Description of shared spaces Room descriptions for each project
PURCHASING Long-term relationships with suppliers Standardized production High degree of prefabrication Best-in-class logistics
PURCHASING Long-term cooperation 3-4 suppliers per category Uniform pricing among suppliers Develop process 20 contracts per project Cost control Get useful key figures
Affordable & space efficient apartments APARTMENT SALES Investment sourcing 7 Handover & property management Property management 8 1 2 4 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
THE SALES PROCESS
DIGITAL SALES PROCESS IMPROVES CUSTOMER SATISFACTION & REDUCES SALES RISK Market analysis Planning of sales start Marketing of the project Sales start Digital apartment selector opens Prioritize apartments dated spot in line to compare 40% of customers get their first choice Pre-purchase agreement Signed at physical meeting Construction starts when sales threshold reached Grant agreement Signed ~6 months before access SEK 100,000 deposit paid Booking agreement Non-binding digital contract and booking fee of SEK 25,000 Access Final payment and get keys
WE ADVERTISE WHERE OUR DIGITAL URBANITES ARE
FACEBOOK & INSTAGRAM
WHERE THEY COMMUTE
Elverket i Nacka
AND WHERE THEY LOOK FOR APARTMENTS
HEMNET
BOOLI
MANY PEOPLE SIGN UP BEFORE SALES START = GREATER INTEREST, FASTER SALES Total 31,600 in register 18,000 for Tellus Towers 2,900 for Bromma Boardwalk
DIGITAL SALES PROCESS IMPROVES CUSTOMER SATISFACTION & REDUCES SALES RISK Market analysis Planning of sales start Marketing of the project Sales start Digital apartment selector opens Prioritize apartments dated spot in line to compare 40% of customers get their first choice Pre-purchase agreement Signed at physical meeting Construction starts when sales threshold reached Grant agreement Signed ~6 months before access SEK 100,000 deposit paid Booking agreement Non-binding digital contract and booking fee of SEK 25,000 Access Final payment and get keys
DIGITAL APARTMENT SELECTOR EASIER FOR CUSTOMERS, FASTER FOR US
ESTIMATED MONTHLY COST CALCULATION HELPS CUSTOMERS CHOOSE WISELY
DATE ON WAITING LIST HELPS CUSTOMERS MAKE TACTICAL CHOICES
>40% CUSTOMERS GET THEIR FIRST CHOICE
DIGITAL SALES PROCESS IMPROVES CUSTOMER SATISFACTION & REDUCES SALES RISK Market analysis Planning of sales start Marketing of the project Sales start Digital apartment selector opens Prioritize apartments dated spot in line to compare 40% of customers get their first choice Pre-purchase agreement Signed at physical meeting Construction starts when sales threshold reached Grant agreement Signed ~6 months before access SEK 100,000 deposit paid Booking agreement Non-binding digital contract and booking fee of SEK 25,000 Access Final payment and get keys
QUICK SALES & CONVERSIONS IN ALL MARKET CONDITIONS Kosmopoliten Sales start Apr 26, 2017 No. of apartments Sales in cautious market Sales start Oct 5, 2017 No. of apartments Sales in regular market No. of apartments Booking agreement Binding agreement Sales threshold 180 160 160 160 140 140 140 120 120 120 100 100 100 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 WEEK 1 6 1011 w16 20 w21 w26 30 w31 w36 40 w41 w46 50 w51 WEEK 1 5 91013 17 20 21 25 293033 37 40 41 45 4950 WEEK 1 5 91013 17 20 21 25 30 40 50
DIGITAL SALES PROCESS IMPROVES CUSTOMER SATISFACTION & REDUCES SALES RISK Market analysis Planning of sales start Marketing of the project Sales start Digital apartment selector opens Prioritize apartments dated spot in line to compare 40% of customers get their first choice Pre-purchase agreement Signed at physical meeting Construction starts when sales threshold reached Grant agreement Signed ~6 months before access SEK 100,000 deposit paid Booking agreement Non-binding digital contract and booking fee of SEK 25,000 Access Final payment and get keys
WE WANT HAPPY CUSTOMERS WHO RECOMMEND US TO FRIENDS & FAMILY
CUSTOMER SATISFACTION INDEX (NKI) SSM 2016 78 Business average 2016 72
Affordable & space efficient apartments DIVESTMENT TO COOPERATIVE Investment sourcing 1 Property 5 ASSOCIATION management 7 8 2 Handover & property management Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
CRITERIA FOR DIVESTMENT TO COOPERATIVE ASSOCIATION SSM forms and registers a cooperative association Order construction start Promissory note Construction loan Turnkey construction agreement Sufficient number of signed legally binding agreements Cooperative association acquires project Sales threshold reached Signed by cooperative association with SSM as a guarantor Signed between cooperative association and SSM
CONSERVATIVE DEBT LEVEL & AFFORDABLE MONTHLY FEES Conservative debt levels for cooperative associations Debt level Residential Metronomen (2016) Flygplansfabriken (2013) SEK 13,500/m 2 SEK 13,500/m 2 Affordable monthly fees Metronomen (2016) Flygplansfabriken (2013) SEK 800/m 2 and year SEK 699/m 2 and year SEK 2,000/month 30 m 2 one-room apartment SEK 1,750/month 30 m 2 one-room apartment
DIVESTMENTS OF RENTAL APARTMENTS Forward funding Construction contract
Affordable & space efficient apartments CONSTRUCTION Investment sourcing 7 Handover & property management Property management 8 1 2 6 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
COST CONTROL Led by Exopen Project controller Structured process Best practice
CONSTRUCTION PROCESS SSM Concept ensures the best planning and methodology Own management Safety Cost control Logistics solutions
SSM TURNKEY CONTRACTOR IN ALL PROJECTS Procurement of sub-contractors starts once sales target reached Usually up to 20 sub-contractors in typical SSM project Framework agreements with 10 sub-contractors
Affordable & space efficient apartments HANDOVER & PROPERTY Investment sourcing 1 Property 7 MANAGEMENT management 7 8 2 Handover & property management Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
HANDOVER PROCESS Customers pay for finished apartments and get keys SSM maintains contact via newsletters New cooperative association SSM staff welcome new homeowners and show them around
Affordable & space efficient apartments PROPERTY MANAGEMENT Investment sourcing 7 Handover & property management Property management 8 1 2 8 Project development Construction 6 Potential divestment Divestment to cooperative association 5 4 3 Design Apartment sales
PROPERTY SERVICES LINK SSM & CUSTOMERS AFTER HANDOVER SSM Property Services ensures quality after handover 2-year contract for technical maintenance and support Contact and request service through SSM website Free to choose new service provider after 2 years SSM Property Services participates in all tender processes Potential to increase tenant services over time
SSM HAS THE MOST SATISFIED CUSTOMERS NKI: 78 (average 72) Highest ranking in 5 of 9 categories