“Strategic Property Asset Management is the process which aligns business and property asset strategies, ensuring the optimisation of an organisation’s property assets in a way which best supports its key business goals and objectives” - RICS Public Sector Asset Management Guidelines 2nd Edition.

Whilst the above quotation comes from public sector guidance, it applies to organisations operating throughout all sectors.  More and more organisations are realising the importance of a current and fit-for-purpose property strategy aligned to their overall operational strategy.  
 
Commonly regarded as a burden on an organisation (given it is, on average, the second largest cost to an organisation after staffing), the real estate should be seen as an asset which, when deployed strategically, will enhance the organisation and its underlying strategy.  All too often there is a reactive, rather than proactive, approach to property asset management despite the significant cost ramifications to the organisation.
 
In order to maximise the value of a real estate portfolio to an organisation, property needs to be prioritised at board level in order to marry the property and organisational strategies.  Competent property / portfolio / asset managers need to be in place (whether internal or external) to advise senior management on the intricacies of property which will not fall within their commercial skillset.
 
Property is an illiquid asset which has a tendency to respond slowly to change.  Increasing flexibility of the property asset through the design, fit-out and occupational terms is an extremely valuable area that business leaders need to be on top of.  The right property strategy for the modern organisation will think about occupational agreements, workplace fit-out, staff attraction and retention, customer experience, branding and be forward thinking.
 
An effective strategic review should be undertaken to develop the right property strategy and the property strategy team needs to:

• Understand the business strategy and thus its corresponding property requirements;
• Engage with key stakeholders at various levels of the organisation;
• Ensure suitable occupational flexibility (including design, fit-out and occupational terms); 
• Take cognisance of modern working practices and make relevant recommendations;
• Assess the estate against agreed KPIs; 
• Conduct relevant options appraisals;
• Undertake strategic location planning (labour costs / markets, customer base, GIS etc.);
• Implement proactive portfolio and property management techniques, and;
• Mitigate liability for surplus / legacy property assets.

An organisation’s property strategy should be regularly reviewed and evolve to ensure its relevance to the changing landscape within which the organisation operates.  This is particularly important where there are expected material opportunities such as lease events (particularly break options and expiries), M&A activity and a drive to mitigate costs. 
 
Please contact me for an informal chat if you are looking to develop your organisation’s property strategy.