The client is a real estate developer active in Asia which is also part of a larger conglomerate which owned a diverse portfolio of subsidiaries in the sector of manufacturing, equipment, automotive and more. Its aspired to be the leading player by constantly bringing in vibrant and innovative ideas into their projects, as well as capitalizing on their experience and connections in manufacturing and automotive sectors.
Aspired to deliver a masterpiece in its real estate development business, the client was planning to cultivate a mega industrial park in the region, focusing on high-value manufacturing activities. The client has also partnered with a top tier aerospace parts manufacturer to initiate a catalytic project which brings in the foreign technology and create demand for more downstream businesses.
Working with a multi-disciplinary team of consultants comprises of master planner, town planner, design & engineering consultant, business strategist and economist, the client aspired to fortify the business model with a special focus on the capital expenditures and return of investment.
Full Story
Having been in the business for almost 100 years, the client began to focus heavily on the real estate sector across Asia over the last decade. Aspiring to be a special breed of developer specialized in manufacturing park development, the client planned to unlock the land value of one of its landbank which is approximately 900 acres in size by building the first high-value manufacturing park in the region. Leveraging on their deep experience and market insight, together with their wide connection in the automotive and manufacturing sector, the client managed to secure a strategic tied-up with a top tier aerospace manufacturer as anchor partner for a catalytic project in the development.
With the land asset and anchor partner ready, the client realized that there is an imperative need to devise a financially feasible master plan that will deliver the state-of-the-art high-value manufacturing park with a sustainable business plan. The client also has greater vision from a socio-economic perspective, which is to create job opportunity for skilled worker, bring in foreign investment and ultimately contribute to GDP uplift.
It is with this reason, the client has engaged with a multi-disciplinary consultant team with our team on-board for the scope of business planning, financial modelling, socio-economic modelling and implementation planning.
Key Outcomes
The team begins with a detailed macro-economic and specific industry analysis a selected list of industry based on the initial planning of the manufacturing park. These industries are related to high-value manufacturing, precision engineering as well as automation. This has formed a basis to better position the manufacturing park and identified the potential customers from the relevant industrial value chain.
Leveraging on our internal database as well as benchmarking on international best practices, we had developed a business model that minimize the upfront investment, reduce the operation and financing risk, at the same time maximize the return of investment. This model involved a combination of land sales and leases to various potential clients. The benefit is that it helps to retain as much of ownership as possible, while providing opportunity for the client to explore other ancillary projects that could generate significant profits from appreciated land value.
Another critical facets that would determine the success of this project is the project financials. Working with design & engineering consultant as well as quantity surveyor, we had captured the key financial information and built a financial model that simulate the project financials for the next 30 years. This provided a clear picture of the funding requirement and its timing. With this as basis, we have helped the client to conduct sensitivity analysis and devise options for pricing strategy as well as construction schedules that are both financially feasible and technically practical.
Due to the large development scale and high requirement of infrastructure as well as public amenities, it is crucial to justify to the project’s benefits to the government authorities. To this end, we had developed a socio-economic model that quantify the benefits such as numbers of high-skilled jobs created, contribution to household income uplift, contribution to Gross National Income and more. These metrices are critical to convince the public sector authorities for approving the project, providing grants or incentives, and any other assistance that would fast-track the development progress.
By the end of the project, the client has a clear picture as to the financial impact and benefits from the business models proposed. We have also prepared an implementation plan that guide the client through the development and grant application process to gain concerted support from the federal and state government in the implementation of the development.
Important Notice
*We take our clients’ confidentiality seriously. While we keep their names anonymous, the results are real.
*This project was delivered by the core team of 27Group during their tenure in a Netherland-based engineering consulting firm. While it may not deliver under 27Group, we hereby declare that the contents above and our involvement are authentic and genuine.
