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

Expenses reduction and portfolio management to uncertain times.

Prepared by

Renato Fusaro

Brazil Real Estate Head

Citigroup


Summary

Summary

  • Portfolio

  • AC versus DC

  • Action plan


Portfolio evolution

Portfolio Evolution


Portfolio occupancy costs

Portfolio – Occupancy costs


Ac versus dc

AC versus DC


Action plan

Action Plan


Reduce portfolio size

Reduce portfolio size


Improve space utilization

Improve space utilization


Improve space utilization1

Improve space utilization

Real Estate expense reduction per year

R$ 2.613 M (rent)

R$ 508 M (condominium)

R$ 158 M (tax)


Close locations

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


    Reduce vacant space1

    Reduce vacant space


    Renegotiate

    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

    Rent decrease


    If you don t reduce expenses you will be the expense to be reduced thanks

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


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