May 6, 2002—UK companies are wasting 18bn a year through inefficient use of property assets, according to an RICS report. Profits could be boosted by 13% if businesses consider sale-and-leaseback deals, hot-desking and other ways of eliminating unused space.
Prepared by economist Roger Bootle for RICS, the report A Waste of Space expressed surprise at how little interest the commercial property market receives: “Compared with almost obsessive interest in the housing market, it is staggering how little thought is paid by business to commercial property, currently worth around 400bn in the UK and accounting for 34% of total business assets.”
Although property is the second highest business cost after wages, 25% of major corporations havent discussed property at board level for at least three years. Apart from releasing capital through sale-and-leaseback deals, the report shows that companies could save 6.5bn through the use of hot-desking and other practices such as remote working.
In an attempt to make businesses more aware of how to maximize the value of their properties, RICS is calling on the Government to support its Property in Business campaign. RICS chief executive Louis Armstrong said: “In the recent budget, the Government increased national insurance contributions, adding a burden of around 4bn to UK employers. But this is small compared to the savings businesses can make if they get the best from their property.
“Senior management should be looking to their property professionals to save money, boost profits or change the property arrangements to release capital to contribute to the growth of the business.”
—Jessica Jarlvi
Reprinted with permission; copyright 2002 i-FM
