A lot of discussions are taking place around how post-Covid office life will look like. Some companies have decided to go down the work-from-home (WFH) is better route, while others think this is a blip and everyone will come back to office once this Covid thing blows over.
This video from Bloomberg suggests reality will be somewhere in the middle, and the nature of the office will fundamentally change. Here is a summary of the more important points.
1) Different people have different preferences. The producer of the video has a conducive environment (good sound equipment) and personal preference (gets to see his child) so he prefers to work from home.
The reporter shares his flat with another tenant and he prefers to work from the office
2) Workers are used to WFO and many want a split between office and home, once Covid is over. The surprising thing is some bosses agree.
3) Obviously the flexibility to WFH is for mainly white collar workers. Many jobs do not have this luxury
4) A consultant interviewed, Mr Dror Poleg, estimates companies spend about 15,000 to 20,000 annually to allow workers to work in an office. He argues that companies may not just think of these numbers as potential cost savings, buy as money they can spend in different ways to make employees more productive.
The office of the future is not a physical location but a network that allows employees to be productive and be happy to continue working for their employers.
5) The Bloomberg commercial real estate editor in London says some real estate owners are truly concerned about the shift to WFH
He noted that London office landlords' share prices have plunged this year but the valuation of their properties have barely changed
He thinks the reality is somewhere in between.
5) Another consultant, Tania Adir, thinks team-building is more effective face to face. So office spaces exist to facilitate collaboration.
She thinks there is a major silent majority who are unhappy working from home, because the home environment is simply not conducive. These people long to return to office
My takeaway from this is that this is still an evolving topic, but it looks like most employees will eventually return to their offices. Office landlords may sigh in relief. However, with the economic impacts from Covid, one has to wonder if employers will try to squeeze some cost savings out of this.
Whether or not a company has a full work-from-office, work-from-home or hybrid model will depend on the nature of the job. For the employee with valuable skills, they will pick the company that suits their working style. Employers will consider this in the war for talent.
None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.
For
Honor is
an action video game from
Ubisoft (listed
on the Paris Stock Exchange) and
Playing Hard is a documentary by filmmaker Jean-Simon Chartier about the creation of
the game,. It follows 3 key
players in the game’s creation,
Creative Director Jason VandenBerghe, Producer Stéphane Cardin, and
Brand Manager Luc Duchaine, chronicling their journey from the start
of their collaboration, until just after the
game launches.
It
took Ubisoft roughly 4 years from 2013 to 2017.
I
will not be doing a review of the documentary, especially since
Kotaku has done a much better job here.
The
film offers a behind-the-scenes look at the development of a
successful video game and I’ll list some of the more business relevant points here.
The
video game development world is an incredibly “savage industry”,
in the words of Cardin. It is a winner-takes-all world where
according to him, 3 percent of all games takes 97 percent of total
profits. Failure isn’t really an option.
Yet
failure may well be the result. Development of a big video game is a
complex process and the people running this at Ubisoft are
experienced professionals. VandenBerghe has 20 years in the industry
and Cardin spent 15 years at Ubisoft in various roles, at the point
the documentary was made.
Experience
doesn’t guarantee success, however. Cardin himself had a project he
was working on for 2 years (and after spending 10 million dollars)
cancelled. He hints at a team presentation that he had to convince
his bosses that they could come up with a good new game proposal
within 6 months, otherwise they would be assigned to work on existing
titles.
The
development process begins with a directive from Ubisoft, where
Cardin’s team is assigned to work with VandenBerghe to pitch his
vision to their bosses. The heart of the game lies in the fight
mechanics, where instead of memorising a series of combo moves, For
Honor tries to mimic a true swordfight, with particular attention to
your enemy’s weapon positioning.
One
important insight from the show is the risk involved and how the
company tries to manage that risk. Yannis Mallet, CEO of UbiSoft
Montreal speaks of his awareness that innovation is inherently risky,
the greater the innovation, the greater the risk. Risk could be
internal because the team has to fight for talent and resources, or
external because competitors could be developing a similar and better
product.
There
is nothing as risky as developing a brand new game from the ground
up. 85 percent of successful games are sequels and development of a
new original game involves considerable risks for a studio.
There
are many hoops the team has to jump through. At the very beginning of
development, they had to demonstrate their concept to their marketing
folks, and get their help coming up with names for the game. At each
stage of the development process, they have to convince their higher
ups that it is worthwhile to continue investing in the game.
3
years before launch, they held gaming tournaments in-house on a
barebones version of the game to test for bugs or unfair game
mechanics. This may sound like fun and games, but different
projects have to compete for budget at each stage of
development. This helped to keep senior management (local CEO
Mallet) engaged and bought-in. Otherwise, their attention may be
diverted to fighting fires on other existing products.
It
isn’t just the local management at Montreal that needs convincing.
Head office in Paris needs to approve all games and they would have
to pitch again, with more bells and whistles, to management there.
The team leads spoke of a fear that another internal competitor would
be coming out with a product that is too similar to their own and be
overshadowed. Also on their minds is the fact that very few original
games are approved. Their pitch went really well and they were
allocated more money than they asked for, much to their delight.
Fast
forward to 1 year and 8 months before game release, they held a press
conference to announce the game. At this point, the pressure to
deliver ramps up. The team now consists of 200 people (soon to grow
to 500), working with 5 studios and work is spread out across
different offices in the world. Inevitably friction amongst the team
begin to occur.
8
months before game release, they attended E3 in Los Angeles and the
game release date was officially announced. One of the telling scenes
show the 3 main characters of the show arguing over the fine points
of the game trailer. For Honor would be highly anticipated,
alongside major competitors like Zelda and Call of Duty. Their
presentation went well, and opened up discussions with partners
around clothing, action figures, animation series and amusement
parks. This led to a bigger tour, in Cologne to do more promotion.
As they inch closer to the deadline, the team begins to feel
the heat and start making hard decisions . Staffing is a problem and a decision was made to discard
split screen functionality, an embarrassing setback, as Ubisoft had
emphasized the importance of this feature in their media events
All
this stress takes a toll on all 3 main characters. VandenBerghe’s
relationship with the rest of the team breaks down. Duchaine speaks
of his children missing him, while he is on one of his many trips to
promote the game. 2 months before game release, Cardin literally had
to escape to a cabin in the woods, to recover from the pressure and
stress.
All
this paid off when they received Gold Certification from Microsoft
and Sony, which allows them to start burning discs for the game. At
this point of the show, it is clear that VandenBerghe, despite
having a cordial relationship with the team, will no longer continue
on future iterations of the project.
Sales
of the game went well, selling more than 1 million units on 14 Feb
2017 and 3 million units within 10 days. Customised versions are
planned for some countries (less bloody for China market) and
promotion work continues for Duchaine. At this point, the show ends
as VandenBerghe moves on to other projects.
Playing
Hard offers a peek into the journey to create a successful triple A
game. By following in the foot steps of the 3 key players, it keeps
the interest of the viewer, while allowing audiences who are
unfamiliar to video game development a glimpse into how it is made.
A Happy New Year and a new REIT IPO. Here are articles from news articles and bloggers who wrote about this. IPO details from The Business Times
ELITE Commercial Reit braved the choppy market to launch its initial public offering (IPO) on Tuesday, pricing its units at £0.68 or S$1.21 per unit, which will translate to a forecast distribution yield of 7.1 per cent for 2020 and 7.2 per cent for 2022.
This is the first pound-denominated Reit listing in Singapore in what could pave the way for more UK-focused Reits to list here, including new asset classes such as student accommodation.
The retail and placement tranches, together with the cornerstone units - the latter mostly taken up by private banking and wealth management clients of UBS, Bank of Singapore, and CIMB - will raise gross proceeds of about £130.9 million in all.
The retail tranche represents just 5 per cent of the offering, which management told reporters in an interview on Tuesday is a function of the "small" offering size.
There is, however, institutional participation from the existing investors in the private trust that holds the properties. All have agreed to roll over their existing stakes into the listed Reit vehicle.
These include investment holding company Kim Seng Holdings, formerly a sponsor of Viva Industrial Trust; as well as Apricot Capital, the private investment firm of Super Group's Teo family; LB Venture Capital, a wholly-owned unit of the Lian Beng Group; and Partner Reinsurance Asia, a UK-based reinsurance company.
Another big REIT IPO. Here are articles from news articles and bloggers who wrote about this. IPO details from The Straits Times
Sydney-headquartered Lendlease Group has lodged a prospectus to list a new Reit (real estate investment trust) - Lendlease Global Commercial Reit - on the Singapore Exchange's (SGX) main board.
About 387.5 million units at $0.88 each will be offered under the initial public offering (IPO) and a placement tranche.
The Reit's manager, Lendlease Global Commercial Trust Management, aims to raise gross proceeds of about $1.03 billion, which will pay for the costs of the IPO, the acquisition of the properties and working capital.
The Reit will initially consist of leasehold retail mall 313@Somerset in Singapore and freehold office property Sky Complex, which comprises three buildings, in Milan, Italy. The Reit's portfolio has an appraised value of about $1.41 billion.
Based on the Reit's unaudited pro forma balance sheet, net asset value per unit as of the proposed listing date will be $0.8134. Net property income is projected to be $47.9 million for next year and $65.8 million for 2021.
Projected distributable income is forecast at $44.9 million for next year and $62.7 million for 2021. Distribution per unit is forecast to be 3.82 cents, with distribution yield at 5.8 per cent for next year.
The public offer opens on Sept 25 at 9pm and closes on Sept 30 at 12pm, with the Reit expected to list on Oct 2. The minimum initial subscription for applications is 1,000 units. Placement tranche units are offered through an international placement including Singapore and excluding the United States.
In case you have been living under a rock for the last 2 years, the US and China are locking horns in a escalating trade war. Here is a timeline from Bloomberg to help you get up to speed. For those of you who have always wanted to buy into banks at their lows, the Big 3 banks have dropped about 20% off their recent 52 week highs. In addition, dividend yields for DBS and UOB have crossed the 5% threshold.
Here is what it looks like for the Tracker Fund of Hong Kong, and the SPDR Straits Times Index ETF
Another week, another US hospitality trust IPO. Here are articles from news articles and bloggers who wrote about this. IPO details from The Business Times
The offering price is US$0.78 per stapled security. A
total of 580.6 million stapled securities are being offered, comprising an
international placement of 535.7 million stapled securities to investors,
including institutional and other investors in Singapore, and an offering of
44.9 million stapled securities to the public in Singapore.
EHT is a stapled group comprising Eagle Hospitality
Real Estate Investment Trust (EH-Reit) and Eagle Hospitality Business Trust
(EH-BT). It has an initial portfolio of 18 full-service hotel properties, with
a total of 5,420 rooms and an aggregate valuation of about US$1.27 billion.
Projected annualised yield from 1st May 2019 to 31st Dec 2019 is 8.2%
There's some buzz around 2 upcoming US REIT IPOs. In case anyone is still making up their minds, better hurry up. If you didn't know about this, here are some articles to help you get started.
Issuing US$0.88 per stapled security, close at noon on May 7
Starts trading 2pm on Thursday, May 9.
The expected distribution yield is 8 per cent from May 1 to Dec 31, 2019, and 8.2 per cent for the projection year 2020.
Quick Notes: What is a Dark Kitchen? Another step in the disruption of the traditional restaurant industry, dark kitchens are growing in popularity. Here is a listing of some points and relevant articles. This is not meant to be analysis. What is a Dark Kitchen?
Dark Kitchens contain purpose-built kitchens fit for delivery with each kitchen allocated to a different restaurant brand.
No seating areas for guests. Essentially a kitchen for servicing food deliveries.
Operator such as Deliveroo takes a larger cut of restaurant takings when they use dark kitchens, customers are charged a delivery fee.
Usually sited in non-prime areas, but close to the customers they are serving
Equipment provided by operators like Deliveroo, but the menus and staff are provided by individual restaurants that want to launch or increase their delivery capacity.
Food ordered via apps online and delivered by couriers Points to note:
Delivering from restaurants require customers to live within a short distance, or food quality suffers. Dark kitchens get around this problem by moving the kitchen to where the customer is.
Food order data, and hence customer preferences can be shared with restaurants
Allows restaurants to test new recipes or even entire concepts at relatively low risk/cost.
Nearly 10 years ago, on 11th Dec, 2008, Bernard Madoff was arrested after his gigantic Ponzi scheme was exposed. Here are some articles to refresh our memories of what happened and what has happened since. What happened then - an article from the Economist explaining what happened when the fraud was exposed Timeline of events, from The Guardian
Many people, rightfully or wrongly, view Government Linked Companies (GLCs) as blue-chip and safe investments. How are they doing in these troubled times? Let's take a look at the FSSTI since the start of the year:
So basically not so good. How about the GLCs listed on the Singapore Stock Exchange? Here is a list of companies that are considered GLCs.
-comparing their prices as of today against the 52 week lows, quite a number of them are at, or quite near these levels. -looking at the dividend yields, a number of them appear quite juicy at the 4% or more range. Do note that special dividends may have been included in the data above, skewing some of them -2009 was the nadir of the Great Financial Crisis and many stocks plumbed all time lows during the year. Comparing the current prices against the lowest price hit during that year, 1 company stands out: SIA -taking the average price of the various companies during 2009, we can see that a large number of them are trading near the 2009 average levels. Some of them are trading lower than the average price during 2009 So price resilience wise, the GLCs are hit by the recent market turmoil, but on the bright side, stock pickers may wish to start checking some of them out. None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.
