Poh Jia Yi Tan Shi Yun Shirin Fariz

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Poh Jia Yi Tan Shi Yun Shirin Fariz Ramlan Benjamin Ong Hong Yew Gary

Poh Jia Yi Tan Shi Yun Shirin Fariz Ramlan Benjamin Ong Hong Yew Gary Wong Kah Fai Chester Mark Joanna Loh Yan Lin

Star City charges an Estate Management fee, collected 5 years in advance, to residents

Star City charges an Estate Management fee, collected 5 years in advance, to residents based on the size of their units. At this stage the fund is not being touched as it is growing interest in the bank (8% on annual deposit) Assignment – part 1 § Total expected income from the handover of units in Zone A & Zone B § Define actual operating cost § Estate management budget P&L for 2016/17/18 § When can the Estate Management operation operate on its own without support from the developer Ascertain if the 20% RESERVE FUND is sufficient to cover expected capitalized refurbishment costs for the next five and ten years. Additionally determine if the 80% Operating Funds are sufficient to cover ongoing operating and maintenance costs

§ 8. 04 billion Kyat upon handover of all resident units in Zone A

§ 8. 04 billion Kyat upon handover of all resident units in Zone A and B § Total management fees collected for the next 5 years § Commercial units are not taken into consideration § Assumed to be collected on a monthly basis § Differs from each unit depending on the business and space allocated

Fixed § Insurance § Direct Staff Costs § House-Keeping: Tools and Chemicals Variable §

Fixed § Insurance § Direct Staff Costs § House-Keeping: Tools and Chemicals Variable § Non-Chargeable Maintenance Expenses § Landscape & Maintenance Expenses § Events/ Decorations/ Refreshments

§ Day-to-Day operating expense § Required for carrying out daily operations § Insurance §

§ Day-to-Day operating expense § Required for carrying out daily operations § Insurance § Should not be included in operating cost § Unless required in order to carry out daily operations § Record as other expenses

Objective: To evaluate if current estate management fees are able to meet the 80%

Objective: To evaluate if current estate management fees are able to meet the 80% operational requirements and the 20% reserve funds

§ Inflation is not taken into consideration § Bank interest rates assumed to remain

§ Inflation is not taken into consideration § Bank interest rates assumed to remain at 8% § Treated as other operating income § Labour cost remain relatively stable

24. 77%

24. 77%

§Positive balance of 25% reserve funds §A surplus of 5% or Ks 201 million

§Positive balance of 25% reserve funds §A surplus of 5% or Ks 201 million §This amount would set aside a sufficient amount for unforeseen circumstances

Inflation affects all costs and could significantly affect the budget P&L

Inflation affects all costs and could significantly affect the budget P&L

Inflation 5. 98%

Inflation 5. 98%

§Currently at 8% §Projected to rise to 10% in 2016 §Projected trend around 7.

§Currently at 8% §Projected to rise to 10% in 2016 §Projected trend around 7. 8% in 2020 (As stated by the Central Statistics Organization Myanmar, 2015)

§ Sufficient funds allowed to accommodate for an inflation of 6% § However, will

§ Sufficient funds allowed to accommodate for an inflation of 6% § However, will not be able to cater for a rise in inflation rates

Inflation 12. 25%

Inflation 12. 25%

§Sufficient funds allowed to accommodate for an inflation of 12. 3% § Reduction in

§Sufficient funds allowed to accommodate for an inflation of 12. 3% § Reduction in reserve funds for capital expenses

Labour Costs accounts for 54% of total operating expenses

Labour Costs accounts for 54% of total operating expenses

8. 89%

8. 89%

§Sufficient funds to accommodate for staff cost increments of up to 9% § Two

§Sufficient funds to accommodate for staff cost increments of up to 9% § Two possible ways: Increase in salaries or increase in manpower

To determine when estate management can be independent

To determine when estate management can be independent

§ Estate management can be independent § Positive gross profit (Operating cost < Income)

§ Estate management can be independent § Positive gross profit (Operating cost < Income) § 80% operating funds are sufficient § 20% reserve funds are sufficient § Does not require assistance from developer § Ability to adapt and make changes within budget allocated § Inflation § Staff cost increment

April-16: Gross profit is observed to be positive there after Feb-18: Negative gross profit

April-16: Gross profit is observed to be positive there after Feb-18: Negative gross profit of 500 k KS; Spike increase in maintenance cost

Star City charges an Estate Management fee, collected 5 years in advance, to residents

Star City charges an Estate Management fee, collected 5 years in advance, to residents based on the size of their units. At this stage the fund is not being touched as it is growing interest in the bank (8% on annual deposit) Assignment – part 2 § Basis of communication strategy to residents on establishment and spending of management fee

To inform the residents on how the 5 -years estate management fee is established

To inform the residents on how the 5 -years estate management fee is established and spent

§ Residents of Star City

§ Residents of Star City

§ Transparent breakdown of estate management fees § Different types of medium

§ Transparent breakdown of estate management fees § Different types of medium

Estate Management Fees (100%) Operating Funds (80%) Reserve Funds (20%)

Estate Management Fees (100%) Operating Funds (80%) Reserve Funds (20%)

§Operating funds § Recurring maintenance and operating cost for the community §Reserved funds §

§Operating funds § Recurring maintenance and operating cost for the community §Reserved funds § Set aside and used for capital expenditure

§Estate management funds grows at a bank interest rate of 8% per annum §Acts

§Estate management funds grows at a bank interest rate of 8% per annum §Acts as a buffer for excess costs due to various extrinsic factors

How are the estate management fees spent ?

How are the estate management fees spent ?

1. Safety 2. Cohesiveness 3. Sustainability 4. High quality of living

1. Safety 2. Cohesiveness 3. Sustainability 4. High quality of living

ESTATE MANAGEMENT PLEDGE 1. 2. 3. 4. 5. 24 Hour Power Supply and tele-communication

ESTATE MANAGEMENT PLEDGE 1. 2. 3. 4. 5. 24 Hour Power Supply and tele-communication network Customer Services (Monday to Saturday) 24 Hour security & Emergency Response Landscaping, Roads, Drainage & Street light maintenance Common Areas, Facilities &Service buildings maintenance

ESTATE MANAGEMENT PLEDGE 6. Waste Water treatment and refuse disposal 7. Animal and pest

ESTATE MANAGEMENT PLEDGE 6. Waste Water treatment and refuse disposal 7. Animal and pest control 8. Treated, Pressurized water supply 9. Schedule bus service 10. Promoting and Organising Cultural activities

CATEGORISATION Sustainability Safety High quality of living 24 Hour Power Supply and telecommunication network

CATEGORISATION Sustainability Safety High quality of living 24 Hour Power Supply and telecommunication network 24 Hour security & Customer Services Emergency Response (Monday to Saturday) Common Areas, Facilities &Service buildings maintenance Waste Water treatment and refuse disposal Treated, Pressurized water supply Animal and pest control Landscaping, Roads, Drainage & Street light maintenance Schedule bus service Cohesiveness of community Promoting and Organising Cultural activities

Community

Community

Sustainability Safety High quality of living Cohesiveness of community 24 Hour Power Supply and

Sustainability Safety High quality of living Cohesiveness of community 24 Hour Power Supply and tele-communication network 24 Hour security & Emergency Response Customer Services (Monday to Saturday) Promoting and Organising Cultural activities Common Areas, Facilities &Service buildings maintenance Waste Water treatment and refuse disposal Treated, Pressurized water supply Animal and pest control Landscaping, Roads, Drainage & Street light maintenance Schedule bus service

Community • Highest cost allocated for Security Services • Increase level of security

Community • Highest cost allocated for Security Services • Increase level of security

§ Concentration of removable and valuable goods on a very small footprint § Without

§ Concentration of removable and valuable goods on a very small footprint § Without a substantial security system, it might impose an unsafe environment § CCTV monitoring, well planned emergency procedures, highly trained security staff and security awareness programme

Common Areas, Facilities & Service Building maintenance § Costs for maintenance, building repairs, recreational

Common Areas, Facilities & Service Building maintenance § Costs for maintenance, building repairs, recreational facilities, equipment, and other expenses § Ensures Star. City maintains excellent standards of living environment for its residents § These costs are administered into the daily functions of the Star. City development

Customer Service • Excellent service quality • Close communication and interaction between residents and

Customer Service • Excellent service quality • Close communication and interaction between residents and front-line staffs • Improve quality of living • Convenience – shuttle bus services, • Housekeeping – clean and safe environment

Promoting and Organising Activities § Aims to remove cultural and social barriers § Promote

Promoting and Organising Activities § Aims to remove cultural and social barriers § Promote and cultivate interaction between residents § Prepares existing residents for a large group of new residents and involving them in the reception process § Reinforces the notion of Star. City as an integrated community

Primary Secondary § Resident’s handbooks § Events § Email § Social media § Newsletter

Primary Secondary § Resident’s handbooks § Events § Email § Social media § Newsletter § Customer service department

 • Informing the residents of Star. City on how the 5 -years estate

• Informing the residents of Star. City on how the 5 -years estate management fee is established and spent. • 80%-20% model and the costs breakdown of the estate management funds. • Dissemination of information through a wide range of mediums • Transparency of information • Residents’ experience