Serene Advisory

Real Estate Wealth Management

Enjoy Your Real Estate Investments

WEALTH CREATION IN REAL ESTATE

Jan 2012

Serene Advisory
Real Estate is Unique
• Immovable (except JV, PE)
• Low Liquidity
• Use creates value unless heritage
• Non fungible
• Each unit/ project is unique – location, view, construction
quality, ventilation, direction (vaastu), construction
quality, etc
• Emotional

• Great avenue for Passive Income

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Real Estate Segments
1 • Land

2 • Plots

3 • Residential

4 • Office

5 • Retail

6 • Hospitality

7 • Healthcare

8 • Education

9 • Industrial

10 • Warehousing

11 • JDA/ Joint Ventures

12 • Private Equity Funds

13 • TDR

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 APPROACH & RESEARCH
• Research • Rent Yields vs Cap Appreciation

Source: Serene Advisory Insights

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 APPROACH & RESEARCH
Average Rent Yields

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 APPROACH & RESEARCH
Real Estate Wealth Creation Approach

Strategy & Goals

Period Review of Review Current

Investment Plan Investment Portfolio

Property Acquisition,
Divestment & Investment Plan
Management

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 Strategy &
Goals

Period Review of Review Current

Investment Plan Investment Portfolio

Property Acquisition,
Divestment & Investment Plan
Management

STRATEGY & GOALS

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 STRATEGY & GOALS
Strategy & Goals
Particulars Goal
5 Year Investment Asset Value ` 100 cr
Target
5 Year Net Cash Flow Target ` 5 cr pa

Type of Properties Residential , Commercial & Industrial

Location Maharashtra & Karnataka
Price Range ` 1 cr to 5 cr
Target Returns 15-20% pa
Cash Flow 6 - 10%
Yearly Investment Target ` 5 cr pa
Leverage (Debt to Asset Value 10 %
Ratio)
Net Cash Flow per Unit 3 - 5%
Investment Stage Pre-Leased, Resale, Under
Construction (Reputed Developers) &
Ready Possession
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 Strategy & Goals

Review Current
Period Review of
Investment Plan Investment
Portfolio

Property Acquisition,
Divestment & Investment Plan
Management

CURRENT PORTFOLIO REVIEW

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 CURRENT PORTFOLIO REVIEW
List of Cash Flow Positive & Negative Properties
Cost of
Particulars `)
Market Value (`) % of MV Net Rent ` pa
`)
Property (`)
Positive Cash Flow Units 113,000,000 30% 1,404,000
Leased
Land 80,000,000 540,000
Residential 27,000,000 660,000
Retail 6,000,000 204,000
Negative Cash Flow Units 258,400,000 70% 1,080,000
Vacant
Land 222,000,000 -
Self Occupied
Retail 18,400,000 1,080,000
Residential 18,000,000 -
Grand Total 371,400,000 ? 2,484,000

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 CURRENT PORTFOLIO REVIEW
• Portfolio Summary • Comments
Portfolio Mix • Portfolio is skewed towards
investments in Land
Retail,
Residential 24,400,000
, , 7%
45,000,000
, 12%

Land,
302,000,00
0 , 81%

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 CURRENT PORTFOLIO REVIEW
• Rental Yield (Leased Units) • Comments
4% • Overall Return on Market
4% 3% value is low @ 1%
3%
• Returns on Residential and
2%
Retail units are on the lower
3% end of the market band
2%

2% 1%
1%
1%
1%
0% 0% 0% 0%
0%

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 CURRENT PORTFOLIO REVIEW
• Location Mix • Comments
100% • 80% of the Investment
Mahim portfolio is concentrated at
90%
19%
single location
80%
• There is a need for
70%
diversification
60%

50%
Virar
40%
81%
30%

20%

10%

0%

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 Strategy & Goals

Period Review of Investment Review Current Investment

Plan Portfolio

Property Acquisition, Investment

Divestment & Management
Plan

INVESTMENT PLAN

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 INVESTMENT PLAN
Investment Plan
Period Particulars Equity Amt Debt Amt Investment
Amount
FY11-12 - ` 30 Lacs 0 ` 30 Lacs
Ready Residential Unit @ ` 5 lacs ` 30 Lacs ` 35 Lacs
Pune
Office @ Mahape ` 50 lacs ` 50 lacs
Total ` 85 lacs ` 30 lacs ` 115 lacs
FY12 - 13

FY13-14

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 Strategy & Goals

Period Review of Investment Review Current Investment

Plan Portfolio

Property
Acquisition, Investment Plan
Divestment &
Management

PROPERTY ACQUISITION, DIVESTMENT & MANAGEMENT

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 PROPERTY ACQUISITION, DIVESTMENT & MANAGEMENT
Action Plan
Unit Action Plan Amount Comments
ABC Divest ` 50 Lacs
Units @ Pune Invest ` 35 Lacs
Office @ Pune Lease ` 3 Lacs pa

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 Strategy & Goals

Period Review
Review Current Investment
of Investment Portfolio
Plan

Property Acquisition,
Investment Plan
Divestment & Management

PERIOD REVIEW OF INVESTMENT PLAN

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 REVIEW OF INVESTMENT PLAN
Quarterly Review of Investment / Divestment Plan
• Next review on July 2012

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 OTHERS
Other aspects to consider
• Tax planning
• Asset Protection
• Estate Planning

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WEALTH CREATION SHOULD BE FUN PROCESS, SO ……

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Enjoy Your Real Estate Investments

FOR FURTHER INFORMATION CONTACT

Anil Bilawala
+91 99675 00002

Anil@SereneAdvisory.in | www.SereneAdvisory.in

Enjoy Your Real Estate Investments

Serene Advisory