kampus palace student residence project genesis to...

KAMPUS PALACE STUDENT RESIDENCEPROJECT GENESIS TO OPERATIONS

ESSEC – MAY 15, 2018

Background – Petr Skrla

BBA in Helderberg College near Cape Town, MBA in Andrews University, Michigan

12 years – Restructuring and Company Management

• Modeta – Czech knitwear company (600 employees)• JSB Glassworks – Crystal glass (2500 employees)• Grafitec – Printing equipment (500 employees)• RPG Real Estate Group – (550 employees, EUR 1.0 bil in assets)

10 years – Financial Advisory Services

• Price Waterhouse in Prague (marketing entry and acquisitions, valuations, privatizations)

• Co-founded Investment Strategies (financial advisory, restructuring)

5 years – Real Estate Investments

• Kampus Palace (student residence concept)• Small residential projects in Prague• Currently co-founding student/senior resi fund

10 years – Venture Capital Fund management

• Co-founded Genesis Capital (EUR 20 mil) Acquisitions, management, divestment

• Partner in Winslow Partners (EUR 40 mil) Acquisitions, management, divestment

7 years – Startups• Various (1993-1999)• RealVet (2015) – Veterinary pharma• BHT (2015) – Radiological protection• MCP (2018) – Immunology/Stem cells• Private incubator/technology dev.

The Kampus Palace Story

1.The Opportunity

2. Economic Analysis

3. Location Analysis

4. Market and Pricing Analysis

5. Project Design Considerations6. Financing

9. Results

8. Operation

7. Construction

10. Contact

Derelict hotel in center of town, complex of 5 buildings, 13,554m2, 2000m2 land.Purchase price EUR 122/m2, but all-in transaction/cleanout at EUR 145/m2.No predetermined concept how to use, but location/price assessment strong.

The Opportunity - 2010

Total land 5514m2, zoning = historical center but building not heritage classified

The Opportunity - 2010

Within 15 min walking full range of top servicesUniversity faculties located 7 min to 12 min awayFaculty of medicine about 12 min by tram (stop in front of Kampus)Central Technical University (VSB) faculties about 20 min by tram

Shopping/Ent.

Shopping/Ent.

Tech. University – 10 mins

Unversity of Ostrava

National Theatre

New Faculty of Sports

Main City Square

New Faculty of Art

Cultural Concert Halls

Location Analysis – 2012-2013

Kampus Palace location absolutely central to universities and central districtIn close proximity to full range of entertainment and leisure activities (parks, hikes, etc)


Ostrava/Kampus on “string” of historic university townsWithin 1.5 hour drive about 4 mil peopleStrong cross-border travel


Macro Economic Analysis – 2012-2013

Ostrava has strong growth driven primarily by investments and business sector activity. During 2006 to 2013 FDI was EUR 35.0 bil, more than 4x higher than previous 8 years. Post 2014 FDI slower and region impacted by negative population growth.

OfficeSeveral recently completed office new-builds had vacancies – shallow market and unable to compete against class-A newbuild.

Senior Living Definitely considered to be an option, though

requires significant ancillary services.

HotelAverage hotel vacancy rates well over 50% - not an option.

CommercialOstrava suffered after the 2006-2012 boom, commercial vacancies in excess of 10%.

Student Housing Ostrava has nearly 24,000 students, of which

15,000 study in the center.

ResidentialRent levels and existing market prices below

construction and renovation costs.

Considered options

01

02

0304

05

06

First step – Analysis of student numbers:

Total students 28 300

Name of Faculty

Distance fromKampus Palace Number of Students

ForeignStudentskm

Total Students

Full-Time

Part-Time

OU – Faculty of Philosophy 0,5 2 131 1 733 405 84OU – Faculty of Education 0,6 3 087 1 718 1 381 25OU – Faculty of Natural Sciences 1,0 1 880 1 591 289 96VŠB – Faculty of Economics 1,4 4 384 3 578 806 239OU – Faculty of Social Sciences 2,4 656 432 224 4OU – Faculty of Art 2,9 393 392 - 67University of Entrepreneurship (Private) 3,8 1 092 260 832 55OU – Faculty of Medicine 4,4 1 739 1 301 439 311VŠB – Other technical faculties in Poruba 10,0 12 938 8 767 4 213 847

Market and Pricing Analysis – 2012-2013

First step – Analysis of student numbers:

28 300

26 577

1 728

TOTAL STUDENTS VŠB – TU, OU, VYSOKÁ ŠKOLA PODNIKÁNÍ

STUDENTS IN CENTER Up to 4 km from Kampus Palace

Students that DO NOT have residency in the Moravian Region

28 300 Students that HAVE residency in the Moravian Region = not eligible for housing subsidies!

CZECH STUDENTS

FOREIGN STUDENTS

TARGET MARKET28 300

26 572 15 362

3 702

1 728

11 660 5 430


Second step – market research (preferences, selection, roommates, services, etc)


Third step – market research on pricingRecommended pricing was EUR 96 to appeal to 85% of the marketOur selected price was EUR 149 targeted to appeal to only 40% of the marketOutcome was to reduce 5430 target students to 2172, or a target 10% market share (207 beds / 2172 targeted students in our price range).

Price Sensitivity Graph – 2 bed room (filter: only students in dorms and renting)

Cum

ulat

ive

resp

onse

(%)

Price (CZK/bed/month)


Project Design Considerations – 2012 - 2013

2. Wanted to create a safe, friendly, stable environment• Decided on full-time employees, no outsourcing

of housekeeping or maintenance

3. Wanted to have a rich program• Created a great student “living room” space and have a

program priority in operations

6. Project staging• We wanted to decrease risk and split the

project into two phases – first 2 buildings, then the rest

• Financing was an issue

5. Cost control• Because we knew the market was price

sensitive, one of our design considerations was controlling costs

4. Wanted a rich offering of services• Created a cool outside sitting area, fitness room, large lobby area

• Worked very hard to find tenants for our 4 commercial spaces that created synergies for our students

1. Wanted to create world-class student residence

• Inspiration was Paris, Berlin, London, Dresden• Put effort into design

Financing Considerations – 2014

1. Market for buildings soft in Ostrava, so banks overall cautious

2. We could offer no pre-lease contracts (students, 1-year lease)

3. We could offer no pre-lease contracts on commercial space (market very soft)

We eventually raised financing with Raiffeisen Leasing (real estate sale-

leaseback)

• Two buildings for renovations (“Opera” and “Posta” – historical names)• Equity investment (purchase and project) = EUR 880,000• Total renovation costs, including interior = EUR 2.7 mil• LTV ratio 63.5% = relatively low risk for bank

BUT SO

Construction – 2014-2015

WHO REALLY IS OUR TARGET STUDENT? HOW WILL WE CAPTURE THEIR ATTENTION?

HOW WILL WE ACHIEVE OUR GOAL OF RESERVATIONS?

Marketing – 2015 to 2016 – Key Questions

19.10

.2015

15.8.

2016

11.-1

2.5.20

16

26.5.

-31.7.

2016

1.7.20

16

4.5.20

16

Star of targeted marketing.

Application date for Kampus Palace2nd-5th year students.

Decision on applications:2nd-5th year students.

Kampus appl. from 1st Year students.

Decision on applications:1st year.

OPENINGof KampusPalace.

Beginning of the semesterOU – 8.9.2016VŠB – 14.9.2016.

City of Ostrava Student Day “Majales 2016”

Vernisaz – student designs of interior.

Bloody Halloween (event for 500 students).

Open house for students and parents.

2.4.- 5

.5. 20

16

8.9.20

16

Student Event before opening.

27.10

.2015

8.1.20

16

24.1.

2016

Action for parents and students.

19.8.

2016

Open house for students with sample room (day is also the University Open Day).

15.1.

2016

15.6.

2016

1.5.20

15

Second Open day to coincide with the Technical University Open Day.

4.3.20

16

Student Party – day before applications are required for first semester.

Marketing – 2015 to 2016 - Timeline

TARGET GROUPS: STUDENTS, PARENTS, GUESTS (HOTEL/SUMMER OPERATIONS)GOAL: RESERVATIONS!PRIORITY: BUILD THE IMAGE OF KAMPUS, CREATE DIRECT LINKS TO STUDENTS, CREATE LOGICAL LINKS

BETWEEN CHANNELS

PARENT PRIORITIES?1. PRICE2. SECURITY3. MEALS

HOTEL GUEST PRIORITIES?1. PRICE2. LOCATION3. SERVICES

STUDENT PRIORITIES?1. PRICE2. LOCATION3. QUALITY4. COMMUNITY

COMMUNICATE

TO TARGET

PERSUADE

RESERVATIONS

INITIAL CONTACT:Media, facebook, web, events, advertising

PERSUATION and MAINTAIN CONTACTImage Kampusu, focused events, quality info, events, reservation system

BED/ROOM RESERVATIONSDirect communication (tel, email, web)

WHERE IS OUR WEAKNESS?WHAT CAN WE DO?

Marketing – 2015 to 2016 - Steps

1. Campaign Focus• Students – VŠB, OU• Parents• Hotel

2. ONLINE - VIRAL• Kampus Web – videos, questionnaires,

competition• Partners– PR articles• Direct Mailing• Reservation system

3. INDOOR• Direct on-site marketing VŠB –EKO, OU

(banners, posters, flyers)

4. OUTDOOR• Targeted, Personal distribution at faculties

and events

7. SOCIAL MEDIA• Facebook• Twitter

• Instagram

6. MEDIA• Television• Press

• Student media

5. SUPPORTING EVENTS• Student events in Kampus and around

the city

Marketing – 2015 to 2016 - Channels

AngličtinaAngličtina

TARGET GROUP: PARENTSWHAT IS OUR GOAL? CONVINCE PARENTS THAT KAMPUS IS THE RIGHT PLACE FOR THEIR CHILDPRIORITY: KAMPUS MUST CONVINCE THAT TOTAL CARE WILL BE TAKEN – SERVICES, FOOD, SAFETY,

STUDYTIME

EVENTS15.1. University of Ostrava – Open Day – on-site promotion with flyers and personal initiations.

24.1. Technical University Faculty of Economics (VŠB – EK) – Open Day

1.5. KAMPUS OPEN DAY FOR PARENTS – Prior to deadline for university applications.

WEB- PR Articles – focus: Kampus safety, quality of rooms, student events, overall quality of life, quality study

time, fitness, etc.

- Promo video – directly for parents, YouTube.

MEDIA- Targeted articles in the press – introduce Kampus to parents – invite to open house, individual tours, Q&A

sessions.- Television journalist report – transformation of derelict hotel to modern residence

ADVERTISING- Secure first position on Google for key works.- Secure banner on City of Ostrava web page.- Possible distribute flyers at the Gaudeamus student trade show.- Find relevant portals where parents might be looking for student accommodation.

Marketing – 2015 to 2016 – Plan to Parents

4. EVENTS:• Kampus events

• Kampus sweepstakes• Events in building “B”

• Cultural events with city• Student events

• Participation in City of Ostrava events

5. ARTICLES:• PR articles about Kampus

• Sharing of interesting articles on student life: career, culture,

• school, etc.

3. QUESTIONNAIRES:• Interior – visualizations, ideas, etc.• Services• Event reservations• Auction• Visualization• Events in Kampus

2. VIDEO:• Events• Construction• Student interviews• Interviews public figures• Transformation of 1 specific room• Interesting tech. info from builders• Attractions around Kampus• Promo video Kampus• Other interesting videos

1. PHOTOS:• Events• Construction• Interiors• Student proposals• Contributions from students• Other

Marketing – 2015 to 2016 – Plan to Students

TARGET GROUP: STUDENTSWHAT IS OUR GOAL? RAISE AWARENESS AND HYPE ABOUT KAMPUS – INCREASE FANSPRIORITY: CREATE COMMUNITY BETWEEN STUDENTS AND KAMPUS

CONTENT

PRIME PARTNERS

OTHER TARGETED PARTNERS

Marketing – 2015 to 2016 – Marketing Partners

1. Marketing campaign was low-

cost high-impact using social media.

2. Had opening with town and town

district mayors, television and media

present.

3. We opened for the 2016-17 school year

with 100% occupancy.

4. Operating profitability (and

overall) was attained from first month.

5. We successfully leased out our four commercial units: 6. In first school year we organized

120 events/activities for students.

Operations – 2016

7. We started our second year also with 100% occupancy, with about 60% of students

carrying over from the first year (40% reflect 1st-year dropouts, relocations, graduates).

8. Working hard to further build

Kampus image, operations, and competitive adv.

9. Working hard to build wider

community of businesses around us to promote location.

Black Kale – raw/vegan food (also manufacture own juices for distribution)Reality Bar – virtual reality and gaming bar, very active in organizing eventsBistro Bocca – cafeteria that now also serves as the official canteen for the UniversitySladke Casy – a pastry and coffee shop, also manufacture confectionary/pastries for distribution

Results – 2016

Petr Skrlaemail: [email protected]: +420 602 663 774

mailto:[email protected]

Construction – 2014-2015

kampus palace student residence project genesis to...

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