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Benchmark & Reporting Standards                          Presented by: Lee TrevenaLease Administration Masterclass        ...
Benchmark & Reporting Standards     Session Overview     •   Measuring Occupancy Cost     •   Preparing a Tenancy Schedule...
Benchmark & Reporting Standards     Monetize Administration     • Need                The boss says so                Fina...
Benchmark & Reporting Standards     Measuring Occupancy Cost     • How do we measure it?                Annualised Per Ann...
Benchmark & Reporting Standards     Measuring Occupancy Cost     • What does it represent?                The cost of bein...
Benchmark & Reporting Standards     Measuring Occupancy Cost     • Why do we measure it?                True cost of occup...
Benchmark & Reporting Standards        Measuring Occupancy Cost YEARS               1                     2               ...
Benchmark & Reporting Standards     Preparing a Tenancy Schedule     • Spreadsheet or System?     • Simple Lease Abstract ...
Benchmark & Reporting Standards     Tracking Critical Dates     • Which Dates?          Lease Start/Expiry          Rent/C...
Benchmark & Reporting Standards     Tracking Critical Dates     • How do we set them up?                Excel – very quiet...
Benchmark & Reporting Standards     Portfolio Performance Analysis     • Sales Productivity                Sales per unit ...
Benchmark & Reporting Standards     Portfolio Performance Analysis     • Property Dept. Performance                Site Se...
Benchmark & Reporting Standards     Portfolio Profiling & Benchmarking     •   Organic analysis – analyst?     •   Busines...
Benchmark & Reporting Standards     Portfolio Profiling & Benchmarking     • Portfolio – define the group                G...
Benchmark & Reporting Standards     Preparing for Portfolio Reviews     •   Collect the information early     •   Work wit...
Benchmark & Reporting Standards     IFRS & FASB 13 Reporting     • NOW = Straight lining of Rent         Known Factors    ...
Benchmark & Reporting Standards     IFRS & FASB 13 Reporting     • FUTURE = Capital Leases                              RE...
Benchmark & Reporting Standards     IFRS & FASB 13 Reporting     • Its coming quicker than you think                Likely...
Benchmark & Reporting Standards                        FASB13                      IS COMINGLease Administration Mastercla...
Benchmark & Reporting Standards     Budgeting & Forecasting     • What is a budget?                When and how long does ...
Benchmark & Reporting Standards     Percentage Rent Tracking     • Key part of Accruals Tracking     • Accounting Periods ...
Benchmark & Reporting Standards                                   Thank you!           au.linkedin.com/in/leetrevena      ...
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Rpcon masterclass s202-benchmark-and-reporting-standards - lee trevena

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Transcript of "Rpcon masterclass s202-benchmark-and-reporting-standards - lee trevena"

  1. 1. Benchmark & Reporting Standards Presented by: Lee TrevenaLease Administration Masterclass Friday, 23rd March 2012
  2. 2. Benchmark & Reporting Standards Session Overview • Measuring Occupancy Cost • Preparing a Tenancy Schedule • Tracking Critical Dates • Portfolio Performance Analysis • Portfolio Profiling & Benchmarking • Preparing for Portfolio Reviews • IFRS & FASB13 Reporting • Budgeting and Forecasting • Percentage Rent TrackingLease Administration Masterclass Friday, 23rd March 2012
  3. 3. Benchmark & Reporting Standards Monetize Administration • Need The boss says so Finance pay the money Leasing guy asked for it I want to keep my job • Want Have we got this information? What do we know about the portfolio? • Compete Better information equals better outcomesLease Administration Masterclass Friday, 23rd March 2012
  4. 4. Benchmark & Reporting Standards Measuring Occupancy Cost • How do we measure it? Annualised Per Annum Dollar ($APA) APA / MAT Annualised Per Metre Dollar ($APM) Total Per Annum Dollar ($TPA) TPA / MAT Annual Variance(s) Total Monthly Cost (cashflow) IFRS – Straight LineLease Administration Masterclass Friday, 23rd March 2012
  5. 5. Benchmark & Reporting Standards Measuring Occupancy Cost • What does it represent? The cost of being in that property – of course! Actual or Effective • What should it include? Promo Levy? Rental Credits & Rebates? Percentage Rent? Statutory Charges?Lease Administration Masterclass Friday, 23rd March 2012
  6. 6. Benchmark & Reporting Standards Measuring Occupancy Cost • Why do we measure it? True cost of occupancy Track cash flow in the business Affordability at renewal Benchmark comparisons To speak ‘Landlord’ Measure Property Performance Rate Staff PerformanceLease Administration Masterclass Friday, 23rd March 2012
  7. 7. Benchmark & Reporting Standards Measuring Occupancy Cost YEARS 1 2 3 4 5 RENTALYR 5 $182,326YR 4 $173,644YR 3 $165,375YR 2 $157,500 50%RentYR 1 Rent Free Abatement $150,000SALES $1,000,000 $1,070,000 $1,150,000 $1,100,000 $1,120,000APA 15.0% 14.7% 14.4% 15.8% 16.3%TPA 11.3% 14.7% 14.4% 13.2% 16.3%VAR -25.0% 0.0% 0.0% -16.7% 0.0%Lease Administration Masterclass Friday, 23rd March 2012
  8. 8. Benchmark & Reporting Standards Preparing a Tenancy Schedule • Spreadsheet or System? • Simple Lease Abstract • What do you include Simple Example Complex Example • Do an Excel Course? • Tenancy Schedule are so 80s!Lease Administration Masterclass Friday, 23rd March 2012
  9. 9. Benchmark & Reporting Standards Tracking Critical Dates • Which Dates? Lease Start/Expiry Rent/Charge Adjustments Option Exercise Dates Accounting Periods Insurance Renewals Compliance Dates Notification Dates Clause Dates – Co-Tenancy, Rebate, Make GoodLease Administration Masterclass Friday, 23rd March 2012
  10. 10. Benchmark & Reporting Standards Tracking Critical Dates • How do we set them up? Excel – very quiet Outlook – very private System – proactive and collaborative • How do you update them? Manual or Automatic • Key Tips 1. Don’t EVER track dates solo 2. Memories are not accurate 3. Read clauses carefullyLease Administration Masterclass Friday, 23rd March 2012
  11. 11. Benchmark & Reporting Standards Portfolio Performance Analysis • Sales Productivity Sales per unit of floorspace How hard is our real estate working • Occupancy Costs Rent + whatever Annual variances in variable charges • Over-trades Not maximising potential sales Larger premises or additional site • Under-trades Operations alert Tenancy too big • Security of Income Expiries & Holdovers Renewal ProgramLease Administration Masterclass Friday, 23rd March 2012
  12. 12. Benchmark & Reporting Standards Portfolio Performance Analysis • Property Dept. Performance Site Selection – Forecast Sales vs Actual Sales Network Planning – Increased Sales & Disposals Security – % of portfolio exposed Deal Negotiation – Forecast Renewals vs Lease Deal Lease Administration – Doc Execution Lease Audit – Savings from Errors Legal – Successful clause negotiationsLease Administration Masterclass Friday, 23rd March 2012
  13. 13. Benchmark & Reporting Standards Portfolio Profiling & Benchmarking • Organic analysis – analyst? • Business management • Trend identification • Decision support – role? • Landlord negotiations • Franchisee negotiations • Compliance • Business protectionLease Administration Masterclass Friday, 23rd March 2012
  14. 14. Benchmark & Reporting Standards Portfolio Profiling & Benchmarking • Portfolio – define the group Group of Stores – i.e. Westfield, CBD, Rural • Profiling – choose your data Store Size Performance Metrics Geography Ownership • Benchmarking – setting standards What is a good number? Are there applicable influences or responses? IF, THEN ELSE Getting business buy-in Source of intelligenceLease Administration Masterclass Friday, 23rd March 2012
  15. 15. Benchmark & Reporting Standards Preparing for Portfolio Reviews • Collect the information early • Work with deal maker • Current, trends & forecasts • Benchmark Your Landlords • Strategise Over-trades and Under-trades • Make the information manageable • Have a strategy • Know your position • Don’t blinkLease Administration Masterclass Friday, 23rd March 2012
  16. 16. Benchmark & Reporting Standards IFRS & FASB 13 Reporting • NOW = Straight lining of Rent Known Factors Rent Incentives Some Reviews – not CPI Not % Rent Periodically Updated Variance to AGAPP is keyLease Administration Masterclass Friday, 23rd March 2012
  17. 17. Benchmark & Reporting Standards IFRS & FASB 13 Reporting • FUTURE = Capital Leases RENTAL Liability Value Asset Value REVIEWS Amortisation TERM Depreciation / Interest Rate - WACC OPTIONS Asset Adjusted Differently to Liability INTELLIGENCE NPV is very complex High degree of Assumption INCENTIVE Periodically Updated MAKE GOODLease Administration Masterclass Friday, 23rd March 2012
  18. 18. Benchmark & Reporting Standards IFRS & FASB 13 Reporting • Its coming quicker than you think Likely 31st December 2015 Yr 1 Comparison – 1st Jan 2015 Yr 2 Comparison – 1st Jan 2014 18 months away! Compare to Y2K timeframe HUGE information requestLease Administration Masterclass Friday, 23rd March 2012
  19. 19. Benchmark & Reporting Standards FASB13 IS COMINGLease Administration Masterclass Friday, 23rd March 2012
  20. 20. Benchmark & Reporting Standards Budgeting & Forecasting • What is a budget? When and how long does it take? • What is a forecast? When and for how long does it take? Accuracy Multi-format (AGAPP, AIFRS) Becoming more complex Existing 12 month cash flow Reviews Expiries and Expiries Percentage Rent Outgoings, Promos, ElectricityLease Administration Masterclass Friday, 23rd March 2012
  21. 21. Benchmark & Reporting Standards Percentage Rent Tracking • Key part of Accruals Tracking • Accounting Periods are critical • How close to threshold are we? • Is it a fix or scaled threshold? • Once YTD sales are ready each month prepare • BenchmarkingLease Administration Masterclass Friday, 23rd March 2012
  22. 22. Benchmark & Reporting Standards Thank you! au.linkedin.com/in/leetrevena leaglelee.com http://www.facebook.com/leaseeagle lee.trevena@leaseeagle.com 0407 711 622Lease Administration Masterclass Friday, 23rd March 2012
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