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

Indicative 
valuation

An ‘Asset Map’ aims to

– Surface the vast majority of asset that is held directly or indirectly by various governments entities, through asset tracing techniques

– Compile an Asset Register and Indicative Valuation by analysing the value of the aggregate inventory and utilizing a blend of property pricing techniques.

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

Publishing an Annual Review, outlining the value and yield of the portfolio, could help generate public support for professionalizing the management of the portfolio (see the attached Lithuanian-example)

 

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 – National Wealth Fund of Finland
  • HCAP – Hellenic National Wealth Fund
  • Central Huijin Investment  China state-owned banks 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

International Examples

Singapore National Wealth Fund

Hong Kong railway operator and 
real estate developer

National Wealth Fund of Finland

UK government real estate holding company

Swedish government real estate
development company

UK Ministry of Transport real estate
development company

Real estate development company for the
Swedish Ministry of Defence

City of Copenhagen Urban Wealth Fund

City of Hamburg Urban Wealth Fund

real estate holding company for Swedish
Ministry of Education

Swedish Railway real estate development company

Central Hujin Investment

China state-owned banks holding company

real estate developer for Stockholm County hospitals

Hellenic National 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

Dag Detter

|

+46 70 327 61 39

|

dag@detterco.com

Dag Detter  |  +46 70 327 61 39  |  DAG@DETTERCO.COM