Property managers should harness data and use technology to find savings, a CIPS Fellows event heard.
Sue Asprey-Price, head of corporate solutions at property management firm JLL, said real estate costs were often overlooked because they were usually lower in scale compared to other business costs such as human capital.
But there are often substantial savings to be found, she said, and by using technology to put a price on underutilised office space, property managers can more effectively engage with other business leaders.
Speaking at a CIPS Fellows event hosted by JLL, Asprey-Price described how the property manager for one client, an insurance company, used company performance data and data from sensors to calculate the ratio of revenue to real estate costs.
Armed with that data, the manager was able to have conversations with each individual business unit within the organisation about their real estate use.
Asprey-Price said: “[The manager] spent a lot of time and had a data scientist team looking at all the algorithms and the financial performance of this insurance business. On average he found out that for every dollar spent [on real estate], their organisation had to earn four – so a 4:1 ratio.
“He identified the cost of the inefficiency of the real estate portfolio and used that data to go back and speak to every single business unit within his organisation.”
One of the bigger spenders was spending £11m more on real estate than the property manager thought necessary. “So he played that back to them and said, ‘You’ve got to earn an additional £44m in revenue and fees just to pay for that excess real estate,’” said Asprey-Price.
She added that the use of a revenue ratio tended to resonate, representing a “huge opportunity for real estate to impact financial performance”.
She predicted that technology that allows not just the monitoring of office space but for office spaces and meeting rooms to be personalised will soon become widespread. This technology will produce masses of data that property managers will need to be able to process.
This is already happening at JLL. “We are being forced to use things like artificial intelligence and robotic process automation because we’re getting streams and streams of data from these organisations and we’ve been tasked with how we interpret that,” explained Asprey-Price.
“How we use that data? Play it back to the clients. Letting them know how the performance of these assets is working is fundamental and something that’s now the norm in terms of what we talk about when we go to deliver [property] services.”
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