Asked whether the board had increased its expectation of value delivery from real estate in the last 12 months, 94 per cent of delegates to The Property Forum said 'yes', compared with 65 per cent in a poll carried out earlier this year.
The poll was carried out during a presentation by director of Andersen Real Estate Corporate Finance, Kevin Hines, on delivering shareholder value through real estate.
A further 50 per cent of delegates working for occupiers — including property and facilities directors working for multinationals and the largest corporations in the UK — said they had either considered or completed projects involving 'outsourcing or divesting real estate services or assets in the past year.'
Asked whether they had reviewed their real estate tenure strategy or carried out a portfolio wide analysis in the past year, 72 per cent said 'yes'.
'There is a lot of expectation and pressure on corporate real estate executives to review how they are doing things,' commented Hines.
However, despite these pressures, just 17 per cent of occupiers in the audience said shareholder value measures were applied to property in their organisations.
Hines said shareholder value theory had grown out of the weaknesses of traditional accounting measures that failed to take into account investment and risk. Key to the theory is assessing the cost of capital including equity and debt.
'By understanding and using these techniques the real estate executive can influence corporate decisions at board level by providing informed property strategies that will deliver added shareholder value,' he said.
Using BT as an example, Hines said property teams had to understand corporate objectives. At BT, the property team created 'relationship managers' to 'go and understand the business issues of the units.'
Source
The Facilities Business
