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How well is your property portfolio performing?

31st May 2017

Categories: Latest News

As a real estate professional and TDA Estates Manager I am often asked about the performance of the estate.  I believe this is equally important for both private and public sector managers.  Key to this question is the property data one holds about the estate.  The operational decisions faced on a day to day basis are clearly driven by data, which in turn helps to drive the strategic choices of the business.

A range of questions that my colleagues and I ask, particularly when reviewing the portfolio, include; do the assets actually support the business objectives or do they actually hinder them? What are the risks associated with holding particular assets? Do the cost, performance and risks outweigh their value? Are they in the right place and is it worthwhile investing to mitigate those risks?

To help inform these decisions I consider a range of factors.  First and foremost, what is the quality of the accommodation? This can have a real impact on staff.  In recent years there has been a significant drive to utilise the space available in a better and more efficient way. 

The overall workspace given to an individual member of staff has reduced as technology has improved.  This has resulted in a reduction in the cost of occupation, particularly with the advent of hot-desking, open plan offices and reduction of paper files and storage.   It goes without saying that a building should be physically safe and secure. 

A well maintained building tends to perform well in terms of energy use.  Furthermore the level of cleanliness and standard of decoration also has a direct impact on staff moral and satisfaction.  Of course the alternative occurs when a property is poorly maintained; levels of disrepair are high when costs of occupation can easily spiral out of control.   

The costs of occupation of the estate I manage are monitored continuously, so I am able to see re-occurring spikes in expenditure or a gradual increase over time.  A simple question I always have in the back of mind is simply how expensive is a building to occupy.  This will include understanding the full utility costs, replacement of lifecycle items (furniture and fixtures), IT equipment and rents and rates.  Collating this occupational information by building and location helps to give an overall performance review of the portfolio and allow buildings to be ranked and decisions taken on potential disposal.

The location of a building is also an important factor to consider as experience has shown it can have a huge impact on productivity.  The length of journey time for staff to travel to work can also have a significant impact on attracting suitable and talented staff.  If the location of the business does not depend upon geographical features or customer access then it is important to consider alternative ways of working, including encouraging remote working.  This will help to attract new talent perhaps from further afield that may, hitherto, act as a barrier.

Having a close awareness of when leases are due for renewal will help determine when decisions are required regarding potential reinvestment in a building or a decision to move.  Knowing these dates well in advance will provide early opportunity for change and transformation in how a business operates.  My own experience has shown that working under tight financial constraints is undoubtedly challenging but having a close understanding of property data will help support the decisions made about buildings.

TDA is able to provide advice and support on building life cycles and occupancy.  Paul Palmer, TDA Estates Manager, can be contacted on paul.palmer@tedcltd.com

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