duration: 2 hrs
instructions: answer all questions
1(a) You are the marketing manager of a real estate development company engaged mainly in residential developments. You have been tasked to prepare for the launch of the company's latest condominium project comprising four 20-storey blocks of 150 units each of various sizes from 90m2 (studio) to 130m2 (3 bedroom) designed by a local architect. There are ample facilities in the condominium development including a swimming pool, a children pool, two tennis courts, a clubhouse, a jogging track, and a basement car park with 700 lots. Green features such as green roof, natural ventilation for car park and eco-lighting etc have been incorporated in the development which has obtained the BCA Green Mark Gold Plus award. Foundation works have just started and the TOP is expected in August 2012. The condominium is located in the ast coast where there are currently three similar condominium projects under construction and being marketed. Your management has decided to price the units from $850,000 to $1.3 million depending on the size, height and orientation. And adequate marketing budget has been provided.
Your task is to secure a successful launch of the condominium project. Outline the marketing strategy you would use to prepare for the launch highlighting the following elements: the kind of publicity to be adopted; the method of sale to be used; the kind of preparatory work to be made for the launch date; and other related tasks. Give reasons for adopting your strategy. Make whatever relevant assumptions necessary. (30 marks)
1(b) You graduated with a degree in real estate some three years ago with two of your friends. All three of you have since been involved separately in valuation, property management, and marketing and agency work, and are keen to start together on your own a real estate firm offering these three areas of services to the general public and corporate clients. You agree to establish a limited liability partnership for this purpose, and to set aside some budget for marketing purposes.
Explain the steps and approach you would take to market your firm and services. The purpose is to ensure that your firm is known in the industry within a year or so, and to enlarge your client base. Make whatever relevant assumptions necessary. (30 marks)
2(a) You act for a seller who wishes to sell his 4-room HDB flat in the open market. The flat is about 10 years old located in Toa Payoh town centre on a high floor. Although no major renovations were undertaken since its purchase, the flat is in a good state of repairs. The seller is looing for a price of $360,000 but he is prepared to let go at $350,000. He started with an asking price of $370,000. Three prospective buyers have expressed interest in this flat. Discuss how you would handle the objections raised by each of them. Recommend an appropriate response to their objections.
(i) Buyer A said: "..... Yes, the flat is suitable but at $370,000 it is too expensive. It is difficult for me to get a loan. I'll buy if you can give me a 10% discount." (6 marks)
(ii) Buyer B countered: "The flat is very plain. Substantial renovation works have to be carried out. That would cost at least $30,000. All in all, I'd need to spend some $400,000 for the flat. This is too high. I can't afford this amount." (6 marks)
(iii) Buter C replied: "My valuer estimated this flat to be worth not more that $340,000. Based on your asking price, I've to pay $30,000 cash premium. The diffrence is too big. I can only accept a few thousand dollars but definitely not $30,000 more." (6 marks)
2(b) You are the facility manager of a retail company dealing with the sale of shoes and sandals made locally as well as exports. Your company is a medium-sized retail firm with two outlets in two separate shopping centres located in the suburban areas. Both these outlets are on a three-year lease. In view of good business, your company intends to expand its operations, and is looking for a suitable shopping centre space of some 300m2 for its third outlet. You have worked out a budget for three years at a rental of not more than $60 per sq metre gross per month exclusive of service charges.
A new 3-storey shopping mall in a neighbourhood town will be soon be completed in three months' time. The mall has a lettable floor area of 200,000 sq metres with ample parking space. The space for two anchor tenants has already been taken. The centre management has just advertised for lease for the remaining 220 shops units. The standard leasing terms of these shops units are as follows:
(i) Lettable area of units: Ranging from 120m2 to 360m2
(ii) Rental per sq metre per month (exclusive of service charges):
Ground level: $60-$100 per sq metre
Second level: $40-$70 per sq metre
Third level: $30-$50 per sq metre
(iii) Service charge: $0.25 per sq metre per month
(iv) period of lease; Typically two years with an option for two years
You are of the view that the new shopping mall is suitable in terms of location and business development. Your company's preference is for the shop outlet to be located either on the ground or second level in a good location within the mall. You are also looking for a longer lease period of three years, if possible, in order to reduce relocation cost and loss of goodwill.
Based on the facts given above, explain how you would negotatie the shop lease for your company, highlighting your strategies, and what three important leasing terms (beside rental and lease period) you would consider to be reasonable for your shop unit. (22 marks)
-END OF PAPER-