Expenses reduction and portfolio management to uncertain times
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Expenses reduction and portfolio management to uncertain times. Prepared by Renato Fusaro Brazil Real Estate Head Citigroup. Summary. Portfolio AC versus DC Action plan. Portfolio Evolution. Portfolio – Occupancy costs. AC versus DC. Action Plan. Reduce portfolio size.

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Expenses reduction and portfolio management to uncertain times.

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Expenses reduction and portfolio management to uncertain times.

Prepared by

Renato Fusaro

Brazil Real Estate Head

Citigroup


Summary

  • Portfolio

  • AC versus DC

  • Action plan


Portfolio Evolution


Portfolio – Occupancy costs


AC versus DC


Action Plan


Reduce portfolio size


Improve space utilization


Improve space utilization

Real Estate expense reduction per year

R$ 2.613 M (rent)

R$ 508 M (condominium)

R$ 158 M (tax)


Close locations

  • Office consolidation

    JK Financial Center (R$ 90/rsm) to CEAB (R$ 45/rsm)

    • Rent reduction : R$ 2.167M/year

  • Performance analysis

    30 Citifinancial Branches

    • Rent reduction : R$ 1.870M/year

  • Proximity analiysis

    21 Citibank Branches

    • Rent reduction : R$ 4.200M/year


  • Reduce vacant space


    Reduce vacant space


    Renegotiate

    • Use appraisal to assure market rent

    • Start one year early

    • Use inflation rate increase to reduce rent

      • IGPM april 2003 : 32% (less R$ 1MM/year)

      • IGPM july 2008 : 15% (less R$ 270M/year)

    • Maintenance and Cleaning

      • Review scope : R$ 4.13 MM/year


    Rent decrease


    “If you don´t reduce expenses, you will be the expense to be reduced ...!!!”Thanks !!!


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