1、 tenants Start-up funding Classification of investment by priority: External reconstruction Indoor architecture Indoor infrastructure Indoor design General infrastructure changes Development of new space Responsibility / appropriation of funds: Own (Friendship) financing by share equity or bank Own
2、financing or by renitent, e.g. escalator through Carrefour Own financing and in shop are through tenant Own financing or through districts government Districts government Development of new space It must be checked that a transference of invest- ments to other parties does not influence the overall
3、concept - the concept lead must lay at NFSC- Shopping center operations The transference of funds has an influence on rental conditions - a business plan must be developed to compare all possible scenarios NFSCPhase1-chapter-C3 - 13 - For concept implementation two extreme modernization options are
4、available a quick reconstruction should be preferred Modernization process / costs Evaluation of restructuring options Complete Modernization Complete Restructuring at once: Stop of all business activities / break in actual operations Restructuring of complete building with maxi- mum use/realization
5、 of synergies in short period Reopening accompanied by advertising campaign - public must understand the reopening of a new and better concept Gradual restructuring of minor areas: Business will go one in not reconstructed areas Modernization can be done per sections, floors or shopping zones The wh
6、ole process can be extended over time according to concept development Description of options Customer perceives it as new reopening and modernized old operation Only short time period necessary easy logistics No public disturbance Lower reconstruction costs Gradual Modernization Loss of sales can p
7、ercei- vingly be reduced Costs are splitted over time Adaptable to concept development Loss of sales /customers Concept development must be completely finished and detailed - long time (2-4) months) till restructuring start Complicated logistics for modernization Public is disturbed and image of mod
8、ernization will be achieved not that of a new concept (impact on future profits) Modernization cost will be higher -lack of synergies 1 2 NFSCPhase1-chapter-C3 - 14 - To gain new customers and to maintain existent consumers starting expenses should help to build up a good basis for NFSCs future succ
9、ess Additional running and starting expenses Starting advertisement campaign Improved communication policy through additional campaigns and POS-advertising Higher maintenance expenses to keep shopping center always state of the art according to initial concept Source: Finance department, Roland Berg
10、er & Partners Current estimation: advertisement-campaigns: + 500 - 1,000 RMB 1,000 maintenance / repair cost: + 200 RMB 1,000 Total: + 700 -1,200 RMB 1,000 NFSCPhase1-chapter-C3 - 15 - To gain new customers and maintain existent consumers starting expenses should help build up a good basis for NFSC
11、-further success Indoor to increase floor space productivity ensuring a high profitability and fast payback of investment the following measures should be taken: A process for continues unprovements should be established A floor space management must be implemented to integrate only successful shops
12、 in the shopping center and allowing fast adaptation of industry-min and shop-mix to changing competition Market survey should be carried out on a regular basis to maintain contact to the customer (his needs and behavior) General improvements Source: Finance department, Roland Berger & Partners BACK
13、-UP NFSCPhase1-chapter-C3 - 16 - In order to derive the targets for profit & loss three business plan models have to be analyzed -going concern and restructuring Cost model shopping center operations Analysis of 1997 cost structure as a basis, elimination of Yaohan “special” expenses Deduction of costs for sh
