Aegir Port Property Advisers

Current Issues & Ideas

PRESSING PROPERTY ISSUES AS SEEN BY MAJOR PORTS

Port authorities identify the most pressing current and near term property issues as:

Rationalising property portfolios to enhance throughput and increase revenues
Structuring property leases which will reflect the real financial, opportunity and management costs and performance thresholds required to make a real return on the asset
Integrating future development of port lands to leverage off of existing and near term transport infrastructure assets

PORT PROPERTY VALUATIONS AND APPRAISALS

It is now critical for ports to obtain valuations of their land holdings and facilities which truly reflect the value of lying 'within the fence' of such a highly specialised environment as a port to:

Better reassess book values for property assets moving forward to better structure leases
Identifying the real 'market' premium of port located real estate as leaseholds is challenging and requires an in depth knowledge of the working dynamics of ports as a business
Address increasing corporate reporting requirements, especially as it relates to assets

PANAMA CANAL EXPANSION TO IMPACT US EAST AND GULF COAST PORTS AND HOW BUSINESS IS DONE, BUT WHEN AND BY HOW MUCH?

Larger ship classes will require deeper reach into the hinterlands and fewer ports of call to maintain financial viability, so where will they go?
Ports will need to accommodate larger ships and increasing cargo throughput from the same footprint by more carefully integrating property uses at the port and throughout logistical growth poles.
West Coast Gateway ports and class 1 railroads will not take this ling down and will adjust to compete to maintain market share.

RETAINING AND ATTRACTING NEW BUSINESS THROUGH THE RE-USE AND RE-DEVELOPMENT OF EXISTING PORT FACILITIES AND SURPLUS LANDS BECOMES A KEY STRASTEGY FOR PORT GROWTH AND COMPETITIVENESS.

As competition heats up and stakeholders demand maximum performance for all port assets, port properties are coming under increasing scrutiny to produce higher return and produce more competitive advantages through the creative development of surplus lands and re-development of existing facilities.
Re-developed port lands and facilities also benefit ports through increased property revenue streams and values and as standalone assets, all of which facilitates releasing of tied up equity for other port uses such as port modernisation and expansion.

INVESTING IN INFRASTRUCTURE ASSETS: AFTER AN UNDERSTANDABLE SLOWDOWN DURING THE 'GREAT RECESSION' INTEREST IS ONCE AGAIN INCREASING IN INFRASTRUCTURE INVETSTMENTS, INCLUDING PORTS. NOW MORE DIRECT INVESTMENT IS EXPECTED BY INVESTORS INTO PROJECTS.

Ports today are a small segment of the overall infrastructure class but one which offers interesting alternative style investment opportunities for institutional type investors.
Infrastructure investments in the ports sector can also include related transport and logistics schemes supporting port operations as well.

PORT RELATED REAL ESTATE FACILITIES NEED TO HAVE PROPER LEASE STRUCTURES REFLECTING TRUE COSTS, RISKS AND FINANCIAL THRESHOLDS TO BE ACHIEVED BY PORTS.

To accomplish this port's need to have a reasonably good idea as to the basis of value for said facilities
Leases for facilities need to take into account other factors such as operating synergies and market supply and demand issues

Port Property Iinsight © is Aegir's quarterly newsletter reporting on timely and impacting issues for the 'soft' (versus 'hard' or operational) side of the industry, namely issues like real estate, asset management, logistics, strategy and finance, all with a decidedly property perspective. Order your complimentary latest and past issues today here.