We can help through the entire process, from Asset Map and Holding Company to Implementing a hands-on active asset management.

Asset map

The Asset Map could be used as a feasibility study to gain a better understanding of the potential value and revenues generated from better management of public assets. 

The City of Boston can serve as an example of how this works and is described in the IMF Finance & Development-Magazine.

The simple data sets required for producing an Asset Map of the real estate portfolio, can be best understood from the attached Boston-presentation and the underlying data sheets in this link.

Portfolio overview

Publishing a Portfolio Overview, outlining the value and yield of the total portfolio, could help create awareness and generate public support for professionalizing the management of the portfolio. Since this simple document is not formally audited, it can be finalized in a few months on the back of the Asset Map, as was done in Lithuania and Greece.

The Public Wealth Fund

Consolidate the commercial portfolio with the proper governance structure will help minimize fiscal risk and fully delegate financial responsibility and accountability to an independent institution

An independent holding company at arms-length from short-term political interference, will allow government to focus on the wider economic issues by fully delegating the management of the commercial portfolio to professional management.

Active Asset Management

Once inside the holding company, a comprehensive business plan will help put each asset to its most productive use, alternatively making clear the opportunity cost of using the asset in a sub-optimal way.

Implementing a hands-on active asset management will allow you to commercialize, optimize and potentially rationalize your commercial portfolio to the benefit of the whole of society.

Commercialization

of public assets requires that a comprehensive business plan makes an assessment of all assets, including real estate assets that are unused, used by third parties, or directly used in the provision of public services, but that can either be relocated to more cost-effective/ beneficial locations, or used to generate ancillary income.

Optimization

requires economies of scale to be achieved across the entire portfolio.

Rationalization

Is an option that involves determining mature assets, which are those that have reached a fair value and where the proceeds from a sale can be reinvested in assets that are capable of yielding a higher return. Mature assets could be disposed of at the relevant point in the market’s cycle, as part of the broader business plan for maximization of yield across the entire portfolio.
Monies generated from rationalization activities should be first made available as a source of funding for the achievement of the business plan and ultimately to fund other investments such as infrastructure investments. including housing. Alternatively, the yield could be used for economic development in other areas such as schools or hospitals – to the benefit of society as a whole.
Professional management of public Wealth - International examples
  • Temasek – Singapore National Wealth Fund
  • MTR – Hong Kong railway operator and real estate developer
  • Solidium -Finland National Wealth Fund 
  • Senate– Finnish government real estate holding company
  • Central Huijin Investment  Chinese state-owned bank holding company
  • SCIC – Vietnamese National Wealth Fund
  • ÖBAG – Austrian National Wealth Fund
  • BIG – Austrian government real estate holding company
  • HCAP – Hellenic National Wealth Fund
  • ETAD – Hellenic government real estate holding company
  • London Continental Railways UK Ministry of Transport real estate development company
  • The Crown Estate – UK government real estate holding company
  • Hafen City Hamburg – City of Hamburg Urban Wealth Fund
  • By & Havn – City of Copenhagen Urban Wealth Fund
  • Vasakronan – Swedish government real estate development company
  • Jernhusen – Swedish Railway real estate development company
  • Vasallen – Real estate development company for the Swedish Ministry of Defence
  • Locum – Real estate developer for Stockholm County hospitals
  • Akademiska Hus – Real estate holding company for Swedish Ministry of Education
  • Stockholm Stadshus AB – Stockholm Urban Wealth Fund

International Examples

Singapore National Wealth Fund

Hong Kong railway operator and
real estate developer

Finland National Wealth Fund

Finnish government real estate holding company

Central Hujin Investment

Chinese state-owned bank holding company

Vietnamese National Wealth Fund

Austrian National Wealth Fund

Austrian government real estate holding company

Hellenic government real estate holding company

Hellenic National Wealth Fund

UK Ministry of Transport real estate
development company

UK government real estate holding company

City of Hamburg Urban Wealth Fund

City of Copenhagen Urban Wealth Fund

Swedish Railway real estate development company

Swedish government real estate
development company

Real estate developer for Stockholm County hospitals

Real estate development company for the
Swedish Ministry of Defence

Real estate holding company for Swedish
Ministry of Education

City of Stockholm Urban Wealth Fund

“The monetization of these under-exploited real commercial public assets will likely require considerable innovation in capital markets and investment banking

Willem Buiter, Chief Economist Citi Group