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Expenses reduction and portfolio management to uncertain times.

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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  1. Expenses reduction and portfolio management to uncertain times. Prepared by Renato Fusaro Brazil Real Estate Head Citigroup

  2. Summary • Portfolio • AC versus DC • Action plan

  3. Portfolio Evolution

  4. Portfolio – Occupancy costs

  5. AC versus DC

  6. Action Plan

  7. Reduce portfolio size

  8. Improve space utilization

  9. Improve space utilization Real Estate expense reduction per year R$ 2.613 M (rent) R$ 508 M (condominium) R$ 158 M (tax)

  10. 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

  11. Reduce vacant space

  12. Reduce vacant space

  13. 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

  14. Rent decrease

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

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