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Hdfc bank limited
1. Analyzing Corporate Real Estate
Asset Management of
HDFC Bank Ltd.
MBA (REUI) Deepesh Seth Chirag Gehlot Ganesh Vivekanath
Section - A Shubham Bakliwal Akansh Tyagi
Group - 1 Aman Jatale Dinesh Kumar
2. Table of Content
S.No. CONTENT
Slide
Number
1. About HDFC Bank Limited 1-2
2. Real Estate Portfolio 3-6
3. Benchmarking Portfolio 7-8
4. Issues & Challenges along with Workable Strategy 9
3. Source: http://www.hdfcbank.com/aboutus/general/timesbank_amalgamation.htmSLIDE: 1
HDFC Bank Ltd. Profile
Type : Public (NSE : HDFCBANK)
Incorporated in : August, 1994
Headquartered in : Mumbai, India
Employees Base : 87,555 (31st March 2016)
HDFC Bank merged with Times Bank in February 2000, the first merger of two private banks in the
New Generation Private Sector Banks category.
In 2008, Centurion Bank was acquired by HDFC Bank.
HDFC Bank Board approved the acquisition of CBoP for 95.1 billion INR in one of the largest
mergers in the financial sector in India.
8. SLIDE: 6
1. As per our primary research we came to know that HDFC generally leases properties for a period of 20 Years with 5 year rent
incremental clause of 10-20% (Generally 20%) rent increment per annum depending on site location.
2. And Security Deposit is paid in the form of 6 months base rent. And Generally these branch are located at prime location on
major roads & built to suit, hence they always pays a rent premium.
3. As Per Our Data Base: 55% of HDFC Bank Branches are in Semi - Urban & Rural Area | 45% of HDFC Bank Branches are in Urban &
Metro Cities.
NumberCrunching
Total owned Properties 1551.17 Cr.
Assuming rice band of Owned assets
For S. Urban & Rural Areas
(Rs. 3000-7000/sqft)
Avg Rs. 5000/sqft
For Urban & Metro Areas
(Rs. 5000-15000/sqft)
Avg Rs. 10,000/sqft
Assuming Average Price Rs. 7500/sqft
Total Tentative Area Owned
Rs.1551.17Cr./7500/sqft
=2.068mn Sqft
Security Deposits for properties 462.68 Cr.
Rent for S. Urban & Rural Area
(Rs. 50-100/Sqft/month)
Avg. Rs. 75/sqft/month
Rent for Urban & Metro Area
(Rs. 100-150/sqft/month)
Avg. Rs. 125/sqft/month
Assuming Avg. Base rent of
100/sqft/month
1200/sqft/annum
Total Lease Rent paid by HDFC
Bank
Security depo. * 2 * Avg. rent
Escalation.
= 462.68Cr. * 2 * 1.20 = Rs.
1110.43 Cr.
Total Tentative Area Of Leased
Assets
Rs. 1110.43 Cr / 1200 = 9.253mn
Sqft
Total Area of HDFC bank = 2.068+9.253
= 11.321 mn sqft
9. HDFC Bank
Total No Of Branches = 4,541
Branches Classification
ICICI Bank
Total No Of Branches = 4,501
Branches Classification
SLIDE: 7
Metro Branches = 25%
Metro Branches = 1130
Appx. Size = 3250 Sqft
Total Area = 3.67 MnSqft
Urban Branches = 20%
Urban Branches = 904
Appx. Size = 2750 Sqft
Total Area = 2.50 Mn Sqft
S.Urban Branches = 32%
S.Urban Branches = 1446
Appx. Size = 2000 Sqft
Total Area = 2.89 Mn Sqft
Rural Branches = 23%
Rural Branches = 1040
Appx. Size = 2000 Sqft
Total Area = 2.08 Mn Sqft
Metro Branches = 27%
Metro Branches = 1213
Appx. Size = 3250 Sqft
Total Area = 3.94 Mn Sqft
Urban Branches = 25%
Urban Branches = 1126
Appx. Size = 2750 Sqft
Total Area = 3.09 Mn Sqft
S.Urban Branches = 28%
S.Urban Branches = 1261
Appx. Size = 2000 Sqft
Total Area = 2.52 Mn Sqft
Rural Branches = 20%
Rural Branches = 901
Appx. Size = 2000 Sqft
Total Area = 1.80 Mn Sqft
Benchmarking Portfolio
Source: http://bankingonly.com/news/_1109.html
10. HDFC Bank ICICI Bank
SLIDE: 8
ATMs
Total No Of ATMs = 12,054
Appx. Size of ATMs = 80-120 Sqft
Total Area Occupied by ATMs: = 12054 * 100 Sqft
= 1.2mn Sqft
ATMs
Total No Of ATMs = 14,146
Appx. Size of ATMs = 80-120 Sqft
Total Area Occupied by ATMs: = 14146 * 100 Sqft
= 1.4mn Sqft
Analysis
TOTAL AREA = 12.28 Mn Sqft
Total Employee = 87,555
Area Per Employee = 140.25 Sqft
Revenue per Sqft = Rs.38343Cr/12.28mn-Sqft
= Rs. 31,223.94
Profit per Sqft = Rs.12296/12.28 mn-Sqft Cr
= Rs. 10,013
Analysis
TOTAL AREA = 11.35 Mn Sqft
Total Employee = 76,096
Area Per Employee = 149.15 Sqft
Revenue per Sqft = Rs.36546Cr/11.35mn-Sqft
= Rs. 32,199.12
Profit per Sqft = Rs. 9726Cr/11.35 mn-Sqft
= Rs.8569.16
Benchmarking Portfolio
Source 1 : https://www.icicibank.com/managed-assets/docs/investor/annual-reports/2016/icici-bank-annual-report-2015-16.pdf (Page: 25)
Source 2: http://www.hdfcbank.com/assets/pdf/HDFC-Annual-Report-2015-16.pdf (Page: 13)
11. Sr.
No. Issue Solution/Suggestion
1
Centralized CREAM decision making and less
time of contact.
• Currently CREAM decisions are centralized had to be approved from a
central panel taking more time.
• we can form a dedicated CREAM department to act quickly and efficiently.
2
High investment into Furniture & Fixtures as
Compared to Real Estate Investment.
• Changing the CREAM strategy to Lease furniture and Buy Real estate and
not the opposite as they are doing as per now.
3
No preferential treatment to Privileged and
Special customers (Old, Differently abled)
• Provide premium area for privileged & special customers, and let them
know that “we care for you”.
or
• Provide onsite banking services if don’t want to invest in Real Estate space.
4
Growing demand for Banking services and
space, Increase in Surplus Cash
• High time to expand mainly into rural and untapped markets with schemes
like cash less India and transparent transactions after Demonetization.
• High time to expand Real Estate Portfolio with huge cash surpluses and a
buyers' market in Real Estate context
5
Changing Market Place towards Digitisation,
E-economy
• Space requirements will change with Digitisation and virtual banking,
customer areas will decrease and I.T requirements will increase, Bank need
to adapt and strategize accordingly.SLIDE: 9
