Phemey Pon

The economy…

The key to managing crisis…

Is to keep an eye on the long term...

While you are dancing in the flames.

Chairman of Royal Bank of ScotlandSir Philip Hampton

(1)

We are the worst…

Morgan Stanley

Drop by 78%

$89 @14Jun 2007

$20 @16Feb 2009

Goldman Sach

Drop by 65%

$248 @31Oct 2007

$86 @16Feb 2009

CBRE

$41.3 @9Jul 2007

$3.3 @16Feb 2009

Drop by 92%

DTZ

Drop by 96%

$835 @25Dec 2006

$35 @16Feb 2009

Despite the economy…

(2)

Property funds investing in China

How property deals are evaluated?

Evaluate by IRR, Why?

Begin with an end in mind

Sequences of events planned

- when to renovate, refinance & exit

Objective comparison made possible

=>

Initial cash accumulate annually @17%

IRR from first principle

IRR & financial engineering

IRR - 100% equity must attractive

then enhanced by:

-short holding period

-high gearing

-quick refinancing

-vendor financing

Asset Management enhancement

office building of 60,000 sf

Upon acquisitionUnit rent pm = $5.6 + $4.4 =$10Unit rent pa = $120Unit CV at 4% return =$3,000

24 months after asset mgt

IRR=110%

Unit rent pm = 12+8.8+5 =$25.8Unit rent pa = $309.6Unit CV at 5% return =$6,192

Asset Management Proposal

rental goal

Proposed Rental Goal

Average unit rent

Year

Average unit rent

Year

% Increase over previous year

Breakdowns

Repositioning

Skillful neg & lease admin

4

92

5

1 3

$1 av. rent increase

($1 x 80,000 x 12) / 5%

$20M value increaseAttention to every $1 av. rent

What’s in it for you?

Opportunities of

Mainland property developers

What’s in it for you?

Opportunities in

Saigon of Vietnam

19 Aug 2007

25 Aug 2007

Marketing materials to media

成功饮越南头啖汤

1. Why Saigon now?

2. What strategies we use?

3. What have we done successfully?

Why Saigon now?

Shanghai of China

Saigon of Vietnam

Shanghai 10 years ago

人均GDP $2,200

1995 2006 =

GDP Growth 2001-2007

11%

1

2

Govt welcome foreign investment

Strong demand on office

Total stock = 350,000 m2

1

2

1

0% vacancy

Strong demand on hotel

7,700 rooms only

50% of Hong Kong rates

Need 20,000 new rooms in 2011

Strong demand on serviced apartment

2,500 units

LongWaiting list

Best timing

Jan 2007

头啖汤

What strategies we use?

•土储资产增值 –长棍

•项目现金收入 –短棍

Profit

Price – GDP growthCost - Inflation

7000 7600 8300 90009900 10700

1170012800

1400015200

3800 4142 45154291 5364

8253

58476373

69477572

2500 2650 2809 2978 31563346 3546 3759 3985 4224

土储资产增值 -长棍

10% 30% 60%

15亿

57亿

149亿83亿

35亿

10亿

半亿3亿 半亿

投1亿前期,球场,专业费

土地面积 100公顷楼面地价 HK$100 psm总地价 1亿

610

3

10% 30% 60%

3亿

66亿

22亿5亿

NPV @ 6% = 46亿

半亿半亿

IRR = 56%

4亿 => 46亿

DCF valuation magic

• Selling price = USD2,500

• AV=USD500 Bldg Cost=USD750

• Profit Margin = 50%

• IRR (full equity) ≈ 25%

项目现金收入 –短棍 - Deal in CBD

What have we done successfully?

CBD

土储资产增值 –长棍

土地面积=1,350万m2

20,000亩

项目现金收入 – Deals in CBD –短棍

What’s in it for you?

(3)

www.sethgodin.com

Content – domain knowledge

• People you know

• Skills you’ve developed

Process – emotional intelligence skill

• Visualizing success

• Persuading other people of your point of view

• Managing projects

Process – emotional intelligence skill

• As the world changes ever faster

• As industries shrinks & others grow

• Process ability is priceless

Communication skills

• Public speaking

• Presentation

Communication skills

• Public speaking

• Presentation

http://speaking.alltop.com

Q & A before Conclusion

The economy…

Your mental view…

“Success always comes when preparation meets opportunity”

Henry Hartman