Real Estate in Emerging Markets: Key Success Factors.

CoreNet Global Zurich Discovery Forum11th December 2014

Operational Performance Process Improvement Environment

Overview of Discussion

• Real Estate Property Portfolio• Challenges• Success Factors• Summary• Questions

Real Estate Portfolio Overview

Operational Performance Process Improvement Environment

EMEA & India Portfolio Overview

EMEA / India Port

Pfizer’s property portfolio in EMEA and India has a total square footage of 14,579,032

• ~27.5 million sqftoffice space globally(non-manufacturing)

• ~15 million sqftEMEA & India(manufacturing inclusive)

EMEA & IndiaPortfolio Breakdown

Emerging Markets Overview (Non-manufacturing space)

Challenges

Operational Performance Process Improvement Environment

Environment and Political Arena

• Political, economic and security uncertainty• Complexity of governmental regulations and

procedures (i.e. tax and legal compliance)• Corruption• Rapidly growing markets• Ability to do business

Business Requirements

• Labour, skills and accessibility• Business Expectations in growth markets• Mergers and Acquisitions (M&A)• Organisational change• Cost saving pressures• Financing• Lease data and documentation (paper trail)• Lease clauses:

– Environmental Health and Safety (EHS)– U.S. Foreign Corrupt Practices Act of 1977 (FCPA)

Real Estate

• Property availability, standards and grades• Condition and age of real estate portfolio• Landlord capabilities• Building Services (Cafeteria, Gym, etc.)• Location and transport routes• Fire life safety standards• Geographical reach and quality of service

providers and affiliates (i.e. RE/FM)• Environmental health and safety due diligence• Security due diligence

Success Factors

Operational Performance Process Improvement Environment

Success Factors

• Stakeholder engagement– Business, HR, IT, etc.– Business and headcount changes

• Core delivery team (space planning, project management, facilities management team, etc.)

• Centralised real estate legal support• Broker model and partnership • Property database and critical date summary• Financial (not main CBD, landlord fit-out, etc.)• Corporate Services Account Team (CSAT)

Market Reports and Overview

• Market Reports• Property overviews• When to go to market• Broker support

• Short lists• Floor plans• Due Diligence

Space Standards

• Space guidelines• Flexibility (sub-lease)• Landlord fit-outs guidelines• Quality of fit-out

Summary

Operational Performance Process Improvement Environment

Emerging MarketsActive Space Glidepath 2010 - 2014

EMEA Active Space Glidepath 2010 - 2014

Questions

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Operational Performance Process Improvement Environment