3 reasons why property portfolios underperform… and why you can’t blame bad luck
If you’re writing off property costs as a necessary evil and your business isn’t taking an active interest in your portfolio, then you’re making a big mistake.
Property costs are easy to excuse as just an expense, most managers believing that property offers little return on investment, BUT with the right approach and a clear understanding of what your business needs, your property can actually add value and profit to your organisation.
- are you taking the time to think of your property portfolio as a broader investment rather than simple bricks and mortar expense?
- have you hired someone you trust to put your business needs first?
- do you have a good grasp of the current property markets where your business is located?
- have you got a single source of truth providing analysis of your spend?
If you answered no to any of those questions, then read on (and take notes).
Remember: before you can fix the problem, you need to understand how it became such a problem in the first place.
And believe me – it wasn’t bad luck!
Here are the top 3 reasons your property portfolio is under performing:
1. Organisations are caught in a time warp
The last 20 years have seen huge changes in the way commercial property is sourced, managed and leveraged – and yet most companies continue to use a simplistic approach to managing their portfolio.
Updating the way you manage your property portfolio is a must if you want your organisation to stay ahead of the pack and save money.
While property is still treated as a basic expense, it needs to be re-imagined as part of your larger brand and an essential, useful part of your core business infrastructure. That means ensuring the costs, the portfolio you hold and the way you deliver services is optimal for your business.
Smart property management requires a strategic and progressive approach. This includes looking at everything from location and fitout, to the way you capture and analyse your property data.
With a strategic approach, it’s much easier to see where the value lies in your property and to build a stronger position as a business.
2. You’re spending more than you think
A badly managed portfolio can cost a company a LOT more than you’d expect – does saving 30% sound like it’s worth the effort?
We all know the property market can feel like a rollercoaster but that isn’t an excuse for accepting defeat and overspending! It’s the reason you need to ensure you have the right combination of management and knowledge of the market.
A good property management strategy will look at all the ingredients and ensure you’ve got the right fit for your company and, therefore, that you can make the best deals. You need to ask yourself:
- is your location optimal?
- is the workspace fit for purpose?
- do you know how property adds to business performance?
- and how do you balance these needs with fluctuating markets?
If you’re on the front foot and you’ve got your finger on the pulse, you can make smart decisions about commitments and be in a strong position to negotiate … rather than become the star of your own ‘if only’ story.
3. You’re looking the wrong way
QUESTION: Do you spend the same amount of time and money on resourcing property management as you do in HR or IT? If not, why not?
Like HR and IT, you need to think of property as an investment rather than an expense.
It’s time to rewire your processes and give your property portfolio the same amount of attention as you give your staff and your technology.
Your property can be a game changer for your brand. Make sure it’s given the attention that an investment of that size deserves.
And now that you know why your property portfolio is underperforming, it’s time to do something about it. Trust me – you’ll be compensated well for your efforts.