Six signs your business needs a property strategy

The importance of having a plan in place to make sure real estate interests adjust with the business

Far from the slow and restrictive part of a business it once was, property can now flex around business goals, and a property strategy will prove it.

For companies expanding, shrinking, or being altered by market forces that they have no control over, having a strategic property plan in place will ensure that its real estate interests adjust with the business.

A strategy — which must align with the overall goals of the business — will weigh up, for example, how to manage offices around headcount growth or contraction, whether to sub-let surplus space or terminate a lease, or even how to approach an entire portfolio following a company merger.

Making all the right decisions on this front can benefit not just a company’s bottom line, but also its appeal as an employer. So when is the right time to put a strategy in place?

Here are six indicators that you need a property strategy:

  1. You are affected by industry-wide changes. The automotive sector is a good example, where closure of local manufacturing operations is transitioning the sector to a sales and distribution focus. A property strategy can map out future property needs, as well as exit strategies for assets no longer required.
  2. You are undergoing a merger or acquisition. The joining of businesses can result in duplication of facilities and functions. With a strategy in place you can consolidate or rationalise your portfolio, align this with business growth, and support the cultural integration being sought for the new entity.
  3. You are undertaking a major internal initiative. This could include moving to shared services, or outsourcing, and therefore a need to assess future use of space.
  4. Your business is expanding. A property strategy can help match up the business’s preferred style of working, property needs (including how to manage project space required for defined periods only), and how this ties in with broad growth plans.
  5. Your business is downsizing. A property strategy will establish the best way to navigate contractual obligations in under-used assets, whether it be terminating leases early, sub leasing, or divesting surplus space.
  6. Your current lease is expiring. Will you renew the lease? Negotiate a new contract with improved terms? Or find somewhere that better meets your budget and business objectives?

By developing a property strategy, you will be able to understand how real estate can help achieve business objectives and to ensure that business growth is not constrained by physical space.

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