Real Estate Supermarket

+

Business Opportunity Business Opportunity EvaluationEvaluationNeed for One-Stop Shop in Real Estate

www.mastersungroup.com,

+ Opportunity

Development and Asset Management

NRI & HNI : Vacation Home s

Middle Class : Sales & Marketing

Conclusions

http://www.mastersungroup.com/


+ OpportunityOpportunity

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

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

Urban Population

50%40%

10%

Bottom of the pyramid Middle Class Rich

Rich

Middle Class

Bottom of the pyramid



+ Opportunity




Conclusions



+ Land Development – Value ChainLand 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 ProcessMarket

research Design brief

World classarchitects Design and concept

Modelling and

forecastingMarketing

plan Business plan

Fundraising agent Fundraising

Project manageme

ntConstruction

Sales and marketing

Asset manageme

ntRealisation

PRE-CON

STRUCTIO

N

Detailed plans

Building approvals

Financial analysis

Self Outsourced


+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 Financial analysisFinancial analysis

What options are there and which is most profitable?What options are there and which is most profitable? Benefits of doing this are Benefits of doing this are

Differentiated product – able to sell your product in a crowded Differentiated product – able to sell your product in a crowded marketmarket

Delivering what the market wants = building a brandDelivering what the market wants = building a brand Price premium and faster sales ratesPrice premium and faster sales rates = more profit and less risk= more profit and less risk

Then, translating this concept into a site plan and designThen, translating this concept into a site plan and design A collaborative effort between Promoters, we and panel A collaborative effort between Promoters, we and panel

architects.architects.



+Development Methodology Business Plan BUSINESS PLAN = Who is going to do what to make this BUSINESS PLAN = Who is going to do what to make this

project work?project work? How are we intending to SELL what we build? How are we intending to SELL what we build? Who will construct it?Who will construct it? Who will oversee construction?Who will oversee construction? What is the operational and marketing plan?What is the operational and marketing plan? How much money do we expect to make and what funds do How much money do we expect to make and what funds do

we require?we require? How will we manage the risks of the project?How will we manage the risks of the project?

Requires decisions on branding and marketing strategy.Requires decisions on branding and marketing strategy. Need full business plan in order to proceed to Need full business plan in order to proceed to

fundraising .fundraising .



+Development MethodologyDesign Brief NOT “what can I build?” but “what can I sell?”NOT “what can I build?” but “what can I sell?” DESIGN BRIEF = What are you going to build and why?DESIGN BRIEF = What are you going to build and why? Market researchMarket research

Not just a matter of ordering a report, it needs to be properly analysedNot 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 Need to consider the potential audience for the development and how to reach them.reach them. Need to understand market depth and likely acceptance of conceptNeed to understand market depth and likely acceptance of concept Need hard data (market research) and soft data (customer research)Need hard data (market research) and soft data (customer research) Need to identify price points, user preferences, demographics, competitive Need to identify price points, user preferences, demographics, competitive analysis, required features, value drivers etc.analysis, required features, value drivers etc.

Financial analysisFinancial analysis What options are there and which is most profitable?What options are there and which is most profitable?

Benefits of doing this are Benefits of doing this are Differentiated product – able to sell your product in a crowded marketDifferentiated product – able to sell your product in a crowded market Delivering what the market wants = building a brandDelivering what the market wants = building a brand Price premium and faster sales ratesPrice premium and faster sales rates = more profit and less risk= more profit and less risk



Development Methodology Construction & After As your development partner, we will provide services as required As your development partner, we will provide services as required

during the construction and asset management / exit phases.during the construction and asset management / exit phases. These may include any of the following:These may include any of the following:

Project management services (quality, cost control, timeliness)Project management services (quality, cost control, timeliness) Asset management services (retail mall, hotels, golf course maintenance Asset management services (retail mall, hotels, golf course maintenance

etc)etc) Non-executive project management servicesNon-executive project management services Development of exit routes / sales strategies to maximise the return to Development of exit routes / sales strategies to maximise the return to

PromotersPromoters


+ 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

The asset manager provides the following major services. This is not The asset manager provides the following major services. This is not an exhaustive list. an exhaustive list. Maximises the overall profitability of site.Maximises the overall profitability of site. Analysis, options and recommendations to owner for decisions to be made by themAnalysis, options and recommendations to owner for decisions to be made by them Implementation to achieve the objectives and decisions of ownerImplementation to achieve the objectives and decisions of owner As required decisions for the general manager and management team based on those As required decisions for the general manager and management team based on those

objectivesobjectives Ensures that the strategy is converted to tactics and implemented with changes as Ensures that the strategy is converted to tactics and implemented with changes as

requiredrequired Looks at each Area of Operations (see above list) and look for efficiencies, improvements, Looks at each Area of Operations (see above list) and look for efficiencies, improvements,

structure, operations and quality structure, operations and quality Create Standard Operating Procedures to capture hotel policy on standards, quality, Create Standard Operating Procedures to capture hotel policy on standards, quality,

performance measurementsperformance measurements Leads creation of operating budgets, capex priorities, recommendations and Leads creation of operating budgets, capex priorities, recommendations and

implementationimplementation Builds management team including hiring, reshaping and firing of senior staff, setting Builds management team including hiring, reshaping and firing of senior staff, setting

objectives, performance reviews and bonuses.objectives, performance reviews and bonuses. Ensure non-financial objectives are achieved (eg quality, social justice programs, PR etc)Ensure non-financial objectives are achieved (eg quality, social justice programs, PR etc)



+ Opportunity


NRI & HNI : Vacation Homes


Conclusions



+



+Understanding – Vacation Home Understanding – Vacation Home

Segmentation of Vacation Home market internationally 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



International International Demand DriversDemand Drivers

Economy Economy

PopulationPopulation

Propensity to spend Propensity to spend

Income Levels Income Levels

Rate of borrowing Rate of borrowing

Growth rate Growth rate

Attracting investmentAttracting investment

Government Initiatives Government Initiatives

ConferencesConferences

Baby Boomers

Interest Rates

Key movers of the Vacation Home market

Tourism


+Vacation Homes-Internationally Vacation Homes-Internationally

Source: National Association Of Realtors 2006

Desirable Attributes In A Vacation Home

38%

22%

22%

18%

Close To Ocean/Lake/River Sporting Activities Close To Resort Ares Mountains/Natural Destinations

Leisure Activities Preferred

29%

20%16%

11%

10%

9% 5%

Water Sports Boating Hunting/Fishing Golf Biking/Hiking Skiing Tennis

TennisMode Of Purchase For A Vacation Home

68%

18%

14%

Real Estate Owners Builders

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: Vacation Home Buyers: InternationallyInternationallyDistance (Miles) Vacation Home % Investment Property %

25 44 6925-99 19 9

100-199 22 5200-499 1 *500-999 3 3

1000-1499 * 61500 and more 10 8Median Distance 49 18

* Less than 1 %

Home Size (Sq.ft) Vacation Home % Investment Property %500 4 1

501-1000 14 141001-1500 56 221501-2000 11 312001-2500 9 122501-3000 5 10

3000 and more 1 10Median Size 1290 1700

Format California Coastal South Florida Golf Destinations Ski DestinationsStudio 600 600 700 NA1 BDR 590 600 550 5502 BDR 480 600 450 5803 BDR NA NA 400 600

Premiums ($ 000) 50-150 50-300 50-150 50-100

Distances between residence & Vacation HomeUsually less than 100 miles

Size of home : 1000-1500 sqf

Average value per sq.ft

Source: Economic Realtors Research



US Vacation Home MarketUS 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.SAlong with high growth rates comes heightened competition Brands would soon start at exploiting other geographies

0.05 %

0.08 %

0.10 %


India Vacation Home India Vacation Home

Given the current economic Given the current economic trends we can draw the trends we can draw the following hypothesis:following hypothesis:

- The Size of the Vacation Home - The Size of the Vacation Home industry is approximately US$ industry is approximately US$ 0.757 billion or INR 34,150 0.757 billion or INR 34,150 Crore Crore

Experts predict the GDP growth Experts predict the GDP growth rate to be close to 8%, the same rate to be close to 8%, the same would see a rise in income would see a rise in income levels – A factor which is one of levels – A factor which is one of the key growth drivers 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 %


+

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 Predominantly luxury

consumers are resided in the north and west of the country

Source: Technopark


+ 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

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

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

Direct Selling & Marketing for HNIs, NRIs Direct Selling & Marketing for HNIs, NRIs Dedicated sales and service team for HNIs / NRIsDedicated sales and service team for HNIs / NRIs Dedicated processes and systems to manage service & sales issuesDedicated processes and systems to manage service & sales issues Dedicated telemarketing & call centre supportDedicated telemarketing & call centre support

Direct marketing strategy comprising of internet marketing and other channelsDirect marketing strategy comprising of internet marketing and other channels

Pioneering new and exciting initiativesPioneering new and exciting initiatives Example :Halfshare.com specializes in the shared ownership of luxury vacation Example :Halfshare.com specializes in the shared ownership of luxury vacation

properties throughout North America. properties throughout North America. They help buyers find their ideal vacation property or Vacation Home while matching them with the right They help buyers find their ideal vacation property or Vacation Home while matching them with the right

co-owner through a Buyer Match Planco-owner through a Buyer Match Plan



+

Key Success FactorsKey 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



+



+ Opportunity




Conclusions



+ 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 StrategyDifferentiated Distribution Strategy

Franchisee Full Fledged Company Operations

Franchisee Company Operations+ Franchisee

Aver

age

/ Low

Aver

age

/ Low

HighHigh

Hig

hH

igh

Average / LowAverage / Low

Purchasing Power

Dev

elop

men

t Po

tent

ial


+ Benefits to FranchiseesBenefits 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



+

Goa

Chandigarh

Gurgaon Delhi

Secunderabad Vizag

Vijayawada

Ahmedabad

BangaloreChennai

Hyderabad

Mysore

Bhubaneswar

Lucknow

VadodaraRanchi

Kochi

Thiruvanantpuram

Hubli

Mumbai

Indore

Jaipur

Kolkata

Siliguri

Raipur

Pune

Coimbatore

● Primarily BranchesPrimarily Branches● Franchisee + Franchisee + BranchesBranches● Franchisee OnlyFranchisee Only

Dehradun

Nagpur

Guwahati

AmritsarLudhiana

Distribution Development PlanDistribution 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 FactorsKey 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 FactorsKey Success Factors Integrated SoftwareIntegrated Software

A low cost suite of an easy-to-use integrated software systems A low cost suite of an easy-to-use integrated software systems Cover every key aspect of successful real estate agency Cover every key aspect of successful real estate agency

practicepractice Full technical and training support supplied by the team at Full technical and training support supplied by the team at

Technology. Technology. Software system has a database, lead management , activity Software system has a database, lead management , activity

scheduler, diary and presentations package designed to scheduler, diary and presentations package designed to create efficiency, lift sales and allow accountability in the create efficiency, lift sales and allow accountability in the officeoffice

Software system are fully integrated. Software system are fully integrated. This means that data only needs to be entered once. It is This means that data only needs to be entered once. It is

then available for use in all modules of the system then available for use in all modules of the system



+ Opportunity




Conclusions



+Differentiation vs. ReturnsHigh Differentiation

Vacation Home/

Retirement & Other

Specialized Concepts

Average Differentiation

Asset Management

Development

Low Differentiation

Middle Class : Sales &

Marketing

Immediate Returns

Medium TermReturns

Long TermReturns



+Sounds interesting ?


+ Contact Us

Sarvajeet Chandra

¥ +91 9920803060,[email protected]

¥ [email protected]

Visit Us at www.mastersungroup.com
