Optimisation of RE portfolio for former state owned telecom operator
Challenge:
A commercial client planned to maximize its RE assets value in a very short time and taking under consideration ca 1000 different RE types.
The basis for the project was that ca 1/3 of the client’s RE unused, and one of the issues was how to change from cost to revenue centres. The second one was an improvement in the use of the remaining portfolio. Partially by selling part of it, renegotiating rents as well as by modernising and improving its quality.
Approach:
Apply strategy of dividing RE into core/non-core groups, identify key sample/test areas, work with them and apply strategic choices of how to utilize them for greater portfolio. Work with the key RE sample areas in details.
The team did a comprehensive analysis in the following areas:
- Commercial
- Financial
- Tax & Legal
Portfolio was divided into sub-groups, based on market analysis; good practice from other respectively linked market segments were analysed. Finally, the list of recommendations at the level of sub-groups and key RE samples was created. All the recommendations had to respect that the core activity of the client could not be negatively influenced.
Value:
Improved RE portfolio performance in many areas and the value for shareholders.
As a result of the completed job:
- Business area improvement was observed in: market flexibility, network optimisation, property risk transfer. There were also improvements in HR and organizational aspects.
- Financial area improvement was observed in: cost reduction, optimal B/S management, reduced cost of opportunity lost, cash generation. The hidden potential of RE was unlocked.
- Tax/Legal – optimised financial and tax structures were implemented as well as legal issues were identified.