Rightsizing Your property portfolios

Posted June 2009

Economic uncertainty is forcing many organisations to take a closer look at their property portfolios.

Changing business needs mean assets must work harder and smarter, and most companies are scrutinising their buildings for proof of efficiency and signs of slack.

The obvious solution may be to consider reducing the property asset base. However putting this into practice, whether the property is owned or leased, can be a very complex task.

Why property portfolio management is important

Cost-cutting decisions are often made in less than ideal conditions, at best, and in crisis-driven scenarios at worst.

This can lead to a mismatch of property, as can legacy issues arising from mergers and acquisitions.

The impact on investment planning decisions and the resulting inefficiencies and excessive operating costs are very visible on the balance sheet. Larger portfolios may already have suffered from a fragmented planning approach, and a lack of knowledge about the portfolio's individual properties is common.

Our property portfolio management service

Our global property portfolio management service has been developed for major corporate organisations with substantial property assets.

We address capital property challenges arising from changing business needs. The focus is often:

• inefficient buildings,
• high operating costs, or
• redundant buildings and land.

We adopt a holistic approach to these assets, enabling clients to treat them as valuable opportunities and producing maximum business efficiency.

For instance, several discrete land parcels may be amalgamated to create a more valuable and efficient business-focused land bank. This can free up additional vacant land, which can then be prepared for disposal.

We have a global team of multi-disciplinary property and facilities management professionals, with comprehensive experience of asset maximisation in many countries and in a variety of circumstances.

We advise on how best to align property portfolios to meet an organisation's needs and how to reduce both the capital and operating costs of the estate, maximising the value of any redundant assets.

Martin Dancy, Faithful+Gould's Strategic Asset Director, comments:

"We've been providing this service for 20 years, in both good and bad economic climates. We're seeing major changes in this period of unprecedented uncertainty. Large companies are saddled with empty properties, half-empty properties, properties in the wrong place, and property that's become a huge drain on their resources.

"There's an important cultural factor here too. When large numbers are made redundant, the resulting empty space has a markedly negative effect on morale, affecting the performance of those remaining. Increasingly we're asked to help clients reconfigure their capital assets to address this problem. It can mean consolidating into a smaller footprint, maximising the efficiency of buildings, improving workplace strategies, preparing buildings and sites for disposal, and reducing operating costs.

"The strength of this service lies in the strategic leadership of making property portfolios more efficient. We help our clients to make sense of the changing shapes of their business, to deal with the current tensions and to plan for recovery in the future.

"We have achieved effective results for a diverse range of global clients in a variety of sectors, including finance, pharmaceuticals, energy and central government. Many of these clients are major players within their fields, and our team has provided sector-specific experience alongside a full range of professional rightsizing skills."