The Team Approach to Asset Management DAY 1 Christian Olofsson
Agenda: 1)Introduction & Background 2)Asset management 3)Teamwork 4)Value creation Disclaimer: Items covered in this presentation are general ways-of-working for the Shopping Center Industry and as per ICSC s documented best practices.
What is asset management An approach that uses all of a shopping centers strengths, both tangible and intangible, in order to achieve the landlords stated objectives. ICSC definition.
Objectives of this session: Create understanding for the need of a asset strategy. Stress the importance of communicating the plan to everyone in your team. Maximize performance and value through teamwork and motivated teams.
Activity #1 Fill in the form with describing words, without thinking too much
Why shopping centres?
Trajan s Market Place, Rome Italy
Eastern Bazaars
Floating markets
Arcades and shopping streets, Europe
Shopping Centre definition A group of retailers, restaurants and other commercial establishments that are planned, developed, owned and managed as one single property. ICSC definition.
How do we define a successful shopping centre?
Success definition A successful shopping center is one that is positioned correctly to provide maximum shopping convenience to its target customers and maximum shopping exposure of the tenants, thus meeting and fulfilling the needs of the trade area intended to be served. ICSC definition.
What the tenant wants: A structured environment that drives retail! Who is our customer? The visitor is the tool we use to satisfy our number one customer - tenants! What the visitor wants: Affordable products that meets needs while exceeding expectations! What the owner wants: Exceed expectations while achieving the highest integrity standards.
What tenants want: Healthy occupancy cost ratio - Value for what they pay. Partnership. Successful marketing campaigns that drives spending. High awareness and loyalty. Vibrant and exciting tenant & merchandise mix. Well maintained & functioning centre. Efficient services.
Landlord tenant relations: Trust Approachability Feedback Flexibility Action Performance Indicators
Do you dare to perform anonymous Tenant Satisfaction surveys?
Retail Real Estate
Retail Real Estate Consumer Shopping Center Commerce Retailer We all speak the Language of Retail: Product Price Convenience Service Experience
Retail Real Estate Investment Macro Economy Government policy Consumer purchase power Investment Return Market Opportunity Capital Commitment Cost of capital Risk Capital Investment benchmarks Rate of return on Capital Operational Management Strategy Tactics Risk Mitigation
Retail Real Estate The value proposition Location Location Location Market access Commercial Concept Leasing Plan Selling the project Ongoing Leasing Stores Demand Traffic Shopping Center Value Shopping Center Earnings Rents Sales THE SHOPPING CENTER INDUSTRY AND ITS FINANCIAL PARTNERS Retailer Earnings Retailer Stock Price Retailer Market Capitalization THE RETAIL INDUSTRY
Asset Management
What is Asset Management The following items identifies Real Estate Asset Management: A. Analysis of Market Potential. B. Conceptualize the ideal Asset solution. C. Establish a Strategic Asset Plan. D. Management of the Strategic Asset plan. E. Communication, Reporting and Performance Measurement. F. Hold/Sell analysis
Someone is the lead singer someone is carrying the drums...
Long term Business Plan Budget Action Plan Property Plan Leasing Strategy Sales strategy Marketing Strategy People Strategy Customer Journey Tools & Support documents Tools & Support documents Tools & Support documents Tools & Support documents Tools & Support documents Tools & Support documents
How can value grow? Our main task is to increase the value of our shopping centre.
How can value grow? To be aware & plan for: Creating Value FFO (Funds From Operations) or NOI (Net Operating Income) Growth Definitions & Policies Strategy of Growth Sales Productivity Occupancy/Rent Increases
How can value grow? To be aware & plan for: Owner s Goals Ability to React Quickly Individual Property Situations Effect of Current Market Trends
What is your unique selling point?
The following items are important for a assets value: a) cash flow (Net operating income - NOI) b) footfall (amount of visitors) c) Sales and revenue d) Location, location, location e) Consumer awareness and popularity f) Tenants operating in the centre g) Competition on the local market h) Conditions of the building i) Technical equipment j) Infrastructure k) Environmental impact
Important for asset value: a) cash flow (Net operating income - NOI) b) footfall (amount of visitors) c) Sales and revenue d) Location, location, location e) Consumer awareness and popularity f) Tenants operating in the centre g) Competition on the local market h) Conditions of the building i) Technical equipment j) Infrastructure k) Environmental impact
Team work
Marketing Leasing Tenant Coordination Operations Business Development Construction / Project Management Shopping Centre Manager Administration Finance Human Resources Accounting Legal
Build high Performance Teams: Successful teamwork = Value Creation
TEAM Customers drives sales Sales drives rents Rents drives income Income drives value
ZION SHOPPING CENTER Experiment Case Study
ZION Shopping centre Experiement Case Study: Summary: Read more details about the centre and your role in the handout. Groups of 6 members; each member plays a defined role. 30 minutes group-work to agree on proposed direction and actions. 5 min presentation from each group; using the ZION layout + flip chart. Task: High-level asset plan for the Board of Directors. Purpose is to get their support and endorsement before a more detailed plan is developed.
Summary of course one
The centre management team: Our main task is to increase the value of the shopping centre.
Use a team approach to enhance your mall operating performance. Put strategies in place, monitor & modify as/when needed. Establish processes that initiate and drives change. Invest in employees, to build high performing teams. Utilize the knowledge & competence within your team. Understand your customers! Dare to be different! Challenge the conventional! Envision going beyond! Be flexible and adaptable!
The centre management team: Tenants want a structured and consistent environment that drives retail! Visitors - Know, understand, utilize your knowledge. Today and tomorrow Exceed expectations on a personal level Successful teamwork = Value Creation
THANK YOU ICSC EUROPEAN RETAIL PROPERTY ACADEMY AMSTERDAM 2018