Requirements / expectations

In SAP, Flexible Real Estate Management would help in managing contracts regardless it is Leasing-In &
Lease-Out in Real Estate business.

ABRE Business requirement is to manage the Lease-Out contracts with Real Estate Customers
respectively. The lease-out would be created in cases when ABRE is renting premises to Tenants.

Post SAP Implementation, When the RE contract is created in SAP system the user will assign appropriate
below objects to one single Contract (Multiple assignments is also possible to one contract)

 Rental Objects(Rental Unit, Rental Space)

 Company codes

For ABRE below contract types are to be defined

Contract
Description Objects Remarks
Type
RO, BU, Land To handle space lease out
to external tenants
including Al Batha Group
Y001 External Lease Out companies
RO, Land To handle Service/ AMC
contracts (Receivable) to
external tenants including
Y002 Service Receivable Al Batha Group companies
RO, BU, SU To handle Service/ AMC
Contract Type
contracts (Payable) of
Y004 Service Payable Vendors
RO To handle space lease out
to internal departments of
Y005 Internal Contract ABRE
RO Lease Out contracts for
third party properties
Y006 Third Party Receivable managed by ABRE
BU AMC contracts for third
party properties managed
Y007 Third Party Payable by ABRE

The Contract type controls the Real Estate contract. ABRE requirement is to capture following key details
such as terms of payment, notices, renewals, rent, and conditions in the contract. User can monitor the
resulting processes and changes them (Whenever required). The RE user will use standard conditions &
keys for Contract, Renewals & Notices

1) RE User will key in Pricing factor (SAP Standard) in the contract (in the form of conditions).

2) These conditions are used for handling the receivables and payables related to the partner
recorded in the contract (Cost Center in case of Internal Contracts)
 3) ABRE intends to upload key documents related to the lease. An alternative provided to user to
instead attach the link to the document. The document will be updated in FTP server secure by
authorization access and link to the document will be provided by the user in RE Contract. User
can just click on the link to access the document from the FTP server.

4) ABRE wants to capture Free Lease period in the Contract (Start & End Date) and the control of
the period will be based on the user. Accordingly, to meet user requirement; possession date
feature will be activated for contract type Y001 (External Lease Out). Possession date can fall
across or in between actual contract start and end date. In case of ABRE, these dates will be used
for internal reporting purpose only.

Example: Lease start / end date is 01.06.2014 and 31.05.2015 while rent free period is from
01.04.2014 to 31.05.2014

In this case, dates will be maintained in the system as follows:

Possession from / to date: 01.04.2014 / 31.05.2015

Contract start/ end date: 01.06.2014 / 31.05.2015

General explanations

For ABRE, The Real Estate contract will be able to handle the functions of all types contracts related to
Real Estate management. The contract type controls whether the contract is for a lease-out or leasing
contract or for various other services. All the important data related to the contract, including the term, the
objects for the contract, and the business partner is maintained. The pricing factor is also entered in the
contract in the form of conditions of the contract and any adjustment rules (adjustment rule feature will not
be used by ABRE to start with). These are used for handling the receivables and payables related to the
partner recorded in the contract.

In the contract, user enters the rules for the term of the contract and for giving notice. User can monitor the
resulting processes and change them, if necessary, in contract processing.

A contract can include more than one object (even objects that are in different buildings).

Define the payment conditions in the contract (payment method, payment term and frequency) for the
chosen condition items.

This component supports automatic methods for adjusting conditions, that is, the mass change of individual
condition amounts on a legal or contractual basis.

Naming Convention

Lease-Out Process

i. For each rental objects which ABRE would Lease Out to tenant needs to create a contract called
Lease-Out Agreement for that customer

ii. In the contract the Customer BP number & Rental Object will be assigned. The contract will have
Validity dates. Parking Space will be assigned as a separate RO in the Contract.
 iii. Every contract will have “Conditions” (customized conditions in RE-FX). These conditions are used
for the Rental amount.

Service Receivable Contracts Process

i) For each rental object/ building/ land which ABRE would maintain and charge a fee to its tenants,
create a Contract called Service Receivable for that Customer.

ii) In the contract the corresponding Customer BP number & Rental Object/ Land will be assigned.
The Contract will have Validity dates.

iii) Each contract will have “Conditions” (Standard conditions in RE-FX). These conditions are used
for the Service amount.

Service Payable Contracts Process

i) For each rental object/ building/ land for which ABRE would give AMC or any other service
contracts, it needs to create a Contract called Service Payable contract for that Vendor.

ii) In the contract the corresponding Vendor BP number & Rental Object will be assigned. The
Contract will have Validity dates. In case the whole building or land is being given in AMC contract,
in that case, instead of RO, the building or land may be assigned to the contract along with
associated Settlement Unit.

iii) Each contract will have “Conditions” (Standard conditions in RE-FX). These conditions are used
for the Rental amount.

Internal Contracts Process

i) For each rental object that has been assigned to internal department of ABRE and where cost
need to be booked to departmental cost center; an internal contract will be created.
ii) For rental objects assigned to internal department but where cost need not be booked to
department cost center, no contract will be created. However to control the occupancy of such
rental, occupancy status of such rental object will be manually updated to “Internally Occupied”.
While the rental object is in this status, user cannot assign the same to any lease out contract.

Third Party Owned Property Lease out Process

ABRE is managing properties which are not owned by Al Batha without Leasing-In. These properties are
called third party owned properties and will not reflect in ABRE financials.

i) All third party owned properties will be created under a specific Business entity to control
reporting, processing and access to master data.
ii) Owners of such third party sites will be created as Balance Sheet GL accounts with line item
management. Open item management will not be switched on and these are maintained as
running accounts by ABRE.
iii) Rental Objects will be assigned to the contract.
iv) Tenants will be created as Business Partner with Customer Account and assigned to the
contract.
v) Third Parties will also be created as Business Partner with no integration to GL accounts. Only
name and address data will be maintained. It will also be assigned to the contract master for
ease of reporting.
vi) Upon processing the invoice, customer will be debited while Third party BS GL account will be
credited.
Third Party Owned Property AMC Process

i) All third party owned properties will be created under a specific Business entity to control
reporting, processing and access to master data.
ii) Owners of such third party sites will be created as Balance Sheet GL accounts with line item
management. Open item management will not be switched on and these are maintained as
running accounts by ABRE.
iii) Building will be assigned to the contract.
iv) AMC vendors will be created as Business Partner with Vendor Account and assigned to the
contract.
v) Third Parties will also be created as Business Partner with no integration to GL accounts. Only
name and address data will be maintained. It will also be assigned to the contract master for
ease of reporting.

Upon processing the invoice, Third party BS GL account will be debited while AMC Vendor will be
credited.

Detailed steps to be followed for creating a contract for lease in, lease out and other contract types have
been mentioned in the Appendix at the end of this document.

Naming Convention
ABRE would follow below mentioned contract number range for all the company codes mentioned in the
organizational structure

Contract Number Range

Contract
Type
Number From Number To Number Int/Ext Assignment
01 0000011000000 0000011999999 Y001
02 0000012000000 0000012999999 Y002
03 0000013000000 0000013999999 Y003
04 0000014000000 0000014999999 Internal Y004
05 0000015000000 0000015999999 Y005
06 0000016000000 0000016999999 Y006
07 0000017000000 0000017999999 Y007

Contract Measurement Types

Measurement Name of the Measurement

Measurement Type Type
Types
M002 No of Keys Handed

Contract Resubmission Reasons (Reminder Reasons)

Resubmission reasons can be used as a diary function to remind you of critical dates relevant to the
contract.

Reason Reason Name

90 Painting
Resubmission Reason
41 Check Renewal Option
43 Check Notice

Besides above standard SAP delivered values will remain available for selection

Special organizational considerations

ABRE will verify all the necessary approvals given by the Legal/ Leasing/ Accounts / Facilities different
departments before creation of the contract.

Flow Chart

Lease-Out AMC
Start

RE Search Request

Contract Offer

Contract Creation

Invoice Posting

Receipt

End
Business process flow for Contract creation
Step No. Step Name Process step description Delivered By

10 RE Search If it is case of lease out scenario where object REORRR/ BP

Request to be offered is unknown, user will create the
RE Search Request. Client will be created as
Business Partner in the role as “Applicant”
and assigned to the RE Search request for
easy reference later on
20 Contract Offer If RE search request results in certain rental REORRR/ REOROF/ BP
objects to be offered and applicant agrees to
process; ABRE leasing department will
negotiate and generate the contract offer for
the applicant. The applicant will be assigned
role “Prospect” before assigning to Contract
Offer. In case of known rental object,
Contract Offer can be created directly without
having to create the RE Search Request
30 Create BP as If BP already exists in a different role, you BP
Tenant can simply edit the BP and add the role
“Tenant” else go to create BP mode and
create with role as “Tenant”
40 Contract Create lease contract in the system. Assign RECN
BP and leased object along with terms/
conditions/ frequency
50 Contract Review Contract details and activate RECN
Activation
60 Notice Once notice is to be served to the tenant or RECN
is received from the tenant, use Give Notice
feature to record notice in the contract. In
order for notice to be effective, reviewer has
to activate the notice
70 Renewal Once renewal is due and approved by the RECN
tenant, access lease contract and use
“Renew Contract” feature to renew the
contract for the agreed period. Reviewer has
to activate the renewal for system to take its
effect.
Note: Similar process will be followed for rest of the contract types except that RE Search Request
and Contract Offer will not be applicable. In case of payable contracts, it will be vendor instead
of customer. In case of Internal contracts, it will be cost center that will be assigned to the
contract

Changes to existing organization

Following are the changes to the existing process

Creation of Business Partner

Creation of Contracts
 Creation of Contract Offer
Creation of RE Search Request

Description of improvements

ABRE intends to use Dunning for the tenants using FI module. (The Dunning Process is covered in
Financial Accounting)
Reports can be extracted based on the Contract type

Description of functional deficits and Approaches to covering functional deficits

Sr. No. Gap/ Deficit Description Gap resolution

1 Registration Municipality Registration Status has to be Contract Screen will be

Status captured to monitor the status of the enhanced to capture the
Registration for the Contract Registration Status

File conversion considerations (Master data Maintenance)

None

System configuration considerations

Different number ranges are to be created for different contract types. All number ranges will be internal.

Number Range for Contract Offer and RE Search Request Type will also be internal

Additional Search Criteria for RE Search Request:

- “Net Floor Area” with 20% deviation
- “Number of Bedrooms” with 100% deviation
- “Rental” with 20% deviation

Partner transfer from “Prospect” to “Master Tenant with Customer Account”

Integration Considerations
Sr. No. Module Description of integration

Not identified

Reporting Considerations

REISCN- Overview
REISCNPE – Term
REISCNNT – Notice
REISCNRN – Renewal
RECARSCN – Reminder Dates
REISCNBP – Business Partner for the Contracts
 REISCNOA – Objects for the Contracts

Authorization and user roles

Creation and management of contract will be done by ABRE Property Manager

Creation of BP creation and review of Customer/Vendor Master would be given to ABRE Property
Manager with reviewer being the Finance department