Integrated and sustainable space optimisation of a real estate portfolio

Andreas Lindenstruth

Corporate Real Estate Journal, 2011, vol. 1, issue 3, 254-264

Abstract: Optimising operative floor space across an entire group will be one of the key tasks of the future because it offers great savings and thus liquidity potential. Depending on the respective industrial sector and the composition of the real estate portfolio, experience suggests that up to 30 per cent of the floor area can be saved. To realise savings of this magnitude, it has become standard practice (at least among major German companies and corporations) to adopt a four-stage model for portfolio-wide floor space optimisation. Essential components of this four-stage model include, among other things, professional corporate real estate management and centralised facility management. Moreover, it is mandatory that the users of the respective business units are integrated into the optimisation process. If user needs are not adequately taken into account, the planning effort runs the risk of missing the actual requirements of the workforce. This might result in inefficiency due to dissatisfied staff or indeed an increase in the amount of sick leave, which could wipe out any monetary benefit the company might have hoped to sustain through more efficient floor space use. Floor space optimisation should not be seen as a one-time process. After all, real estate requirements are themselves subject to continuous change due to the vicissitudes in the working world. This is to some extent explained by technical progress. Accordingly, whole portfolio floor space optimisation ought to be understood as a permanent process that calls for periodic reviews of the status quo and continuous monitoring.

Keywords: corporate real estate management (CREM); facility management (FM); floor space management; floor space optimisation; cost cutting; outsourcing; alignment of interest; labour productivity (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2011
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