The Portal Group recently commissioned a piece of research that interviewed leading UK property professionals, workplace consultants and occupiers to explore how perceptions towards commercial property amongst UK corporates are changing.
The paper entitled Redefining Commercial Property Performance revealed some key shifts in the mind-set and attitudes of occupiers. What the interviews with the likes of RICS, Leesman UK, TD Wealth International, TSK Group, Cushman & Wakefield and Sheffield Hallam University clearly point to is a marked difference in how an organisation’s commercial property portfolio is now being viewed - no longer seen as simply a place of work, but now considered as a key asset, central and pivotal to the overall performance and future success of a business.
What was particularly interesting was the level of significance that the C-Suite now places on the working environment and its ability to perform and contribute to higher productivity. This is a far cry from an era where conversations were largely centred on leases or dilapidations, value was measured in utilisation levels and senior executive involvement in office selection and design was often restricted to a rubber stamping exercise. As Paul Bagust from RICS says, “the role of property needs to be seen as more than a business support function, but one that is strategically linked back to the business.”
So what kind of challenges and opportunities does this intrinsic rise in the stature of commercial property amidst top-level management pose to the industry as a whole? The good news of course is that by engaging directly with a CEO or CFO you now have the ears and eyes of the decision-making team. What’s more complicated though from a supplier perspective, is that it’s now necessary to include a larger number of departments and workplace champions in any property discussions, from HR through to Finance, FM or IT.
The theme that an organisation’s property portfolio is no longer treated in isolation is something that Chris Kane, ex Head of Corporate Real Estate at the BBC concurs with. He refers to a phenomenon termed ‘convergence cubed’, that essentially explains that to achieve the nirvana of building a successful workplace you must ensure that the traditional tribes of the asset, facilities and design/construction are all on the same page.
There is further evidence to say that property needs to be regarded as more than just a tool to improve efficiency and reduce property costs. As John Pike (40 Percent Symposium) comments: “The property guys have to match the property portfolio to the aspirations of the business”. These aspirations are now being directly influenced by the board who are driving the selection process. They want a property solution that closely matches their objectives. So is it cost-effective? Will it support overall productivity but also limit risk in the future? For example if a company grows or contracts they want the reassurance that their property portfolio is flexible enough to reflect these changes without hefty financial penalties. All these factors need to be built into today’s commercial property equation.
Measuring the ROI and value of property remains in the spotlight, but it now less about finances and more about evaluating how effective is the workplace at boosting and inspiring overall productivity, effectiveness, brand values, well-being and retention of staff. Thankfully with the introduction of proven benchmarking such as the Leesman Index (leesmanindex.com/) there is now a global standard by which companies can review and also compare their property performance.
The research concludes that forward-thinking organisations are now beginning to acknowledge and understand how they can unlock the value of their workplaces. Traditional approaches to property based purely on cost are now shifting towards more operational perspectives that takes into account the exact and often unique needs of an individual business and what it is trying to achieve at a strategic level.
However, the secret to unlocking the greatest value from commercial property is to not only create an inspirational workplace but also have the ability to continually mirror and support a company’s goals over time – the essence of true alignment.
Iain Shipley is sales & marketing manager at managed office solutions provider, Portal Group
- The full report entitled Redefining Commercial Property Performance - The alignment of property and workplace with corporate objectives can be downloaded at: http://www.portalgroup.uk.com/white-papers