The most important aspect of property management and how data can help save you money
If you’re serious about managing your property more wisely and increasing your business’s success, ask yourself these two questions:
- How is the information about property expenditure captured in your organisation?
- Do you manage your costs from a single source of data, or are you an organisation with multiple sources of data trapped in various spreadsheets and spread across different business units?
One of the fundamental requirements in building a strong, strategic understanding of your property portfolio is maintaining an effective way of storing your data. In order to build up a picture of exactly where you’re overspending and where your potential for growth is, a central data source is a must.
This seems obvious, right? Unfortunately, one of the most common mistakes we see is multiple business units managing their own property costs or maintaining separate data sets.
This can cause huge problems.
If a business unit is responsible for its own property spend, large anomalies can occur between units, which, without a centralised source of data, can remain unchecked or can be difficult to rein in.
So, centralising property data is the first step towards finding value in your portfolio. After all, if you don’t know where you’re spending how will you know where to save?
Three ways data can help you save money
1. Managing your own costs
The quickest and easiest wins can be made by looking at data on floor space, staff numbers and location and running a comparison between the three to find any obvious problems. You can then use this data to make decisions about where and how staff are accommodated.
2. Beating the market
Most knowledge-based organisations spend 75% of their property costs on rent, rates and taxes.
If 75% of property spend is real estate related, then beating the market – or, at least, managing market exposure – is core to effective property cost management.
All property markets operate in a cycle between under and over supply. The commercial property markets are far more volatile due to the lead time for new supply and variability of demand.
Mapping the data for your major lease commitments to the property cycle enables you to identify both high risks (where renewal of commitments coincided with the top of the market cycle) and best opportunities (where they had commitments in markets at the bottom of the cycle).
Once you identify the risks, the strategy speaks for itself and your market exposure has been minimised. You may have even beaten the market!
3. Big ticket wins
One final way to use metrics to your advantage is to determine the cost of the lease commitment against the expiration date. By mapping this data, you can create a roadmap for lease renewals which works with your resource and spend availability and with the market.
As you can see, creating a centralised approach to property spend not only allows companies to build a clear picture of risk and opportunity, it enables them to manage property in a way which uses evidence to foster growth and stability.