Office Asset Optimisation

Once operational efficiencies are in place, focus can then turn to higher value strategies. Over the past several years, real estate investments have generated steady cash flow and returns. This reality has changed and real estate players have been hit across the value chain such as through reduced operating income and a more clouded operating environment for buildings and tenants alike. While some of the impacts are temporary, others are expected to be more permanent, transforming the future of certain asset classes. Across almost every asset class potential longer-term effects must be considered as well as the required changes that these shifts are likely to bring. This means assessment and reassessment of “risk”. A deeper analysis of existing assets and portfolios is required through the analysis of upside and downside scenarios to identify assets with most operational risks and how to get best positioned for them to adapt to the changing operating environment. Business plans and capital expenditure then need to be adjusted accordingly to ensure they incorporate the relevant value add propositions. As part of this, owners of real estate need to act more flexibly by delivering an active management solution with a focus on sustainability, as well as tenant experience and wellbeing. This requires a change in mindset, from a focus on “service” to a focus on “experience”, which is built on a deep understanding of each building’s story and then curating events that cater to the tenant base. In turn this creates an environment where tenants’ employees want to go and feel part of a community; driving occupier satisfaction and employee engagement to improve retention and enhance commercial opportunities.

Accordingly, data and analytic insights are fundamental to making strategic decisions regarding commercial lease negotiations, asset valuation and improved tenant experience and operations. Technology and digital solutions will be among critical enablers to usher in the new era of real estate, allowing not only the customisation of spaces according to occupant needs (e.g. temperature, humidity) but also taking building management to the next level and addressing sustainability and affordability. Fundamentally, the future of asset optimisation is founded upon landlords and asset managers creating a more transparent and collaborative relationship between owner and occupier to respond to global market trends.

OFFICE ASSET OPTIMISATION FOR TOMORROW

CUSHMAN & WAKEFIELD

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