March 26, 2004—A major research study by corporate real estate organization CoreNet Global predicts significant change for CRE executives who will have to expand their skills beyond property to encompass IT and other support functions.
The research initiative, titled Corporate Real Estate 2010: Enabling Work in a Networked World, centers on eight project teams working with CoreNet Global as partners. The teams include corporate real estate leaders at 125 leading multinational corporations such as ABN AMRO, BP International, Cisco Systems, Disney, Ford, GlaxoSmithKline, Microsoft, Nokia and Proctor and Gamble. A companion survey was conducted separately by Gallup.
Among the core findings of the research are that by 2010, while there will continue to be strategic real estate functions to perform, they will be performed in the context of enhancing worker productivity and company competitiveness through a fully integrated infrastructure that will include human resources, information technology, real estate and other support functions.
CoreNet Global says managing the entire portfolio of business enterprise resources will require skills of the corporate real estate executive beyond real estate.
“It is apparent that the networked business model is changing how businesses operate globally, and as a result, affecting the role of corporate real estate and the corporate infrastructure,” said Sean McCourt, chairman of CoreNet Global and chairman of Ford Land, the real estate and development arm of Ford Motor Co. “Specifically, the networked world is transforming work processes, interaction with business partners and service providers, and the roles of workers.”
CoreNet Global identifies risk transfer to third parties as a significant trend. According to the Gallup survey, more than 35% of responding companies said they would consider transferring their owned assets to a third party for day-to-day financial and operational management. In addition, more than 70% of respondents either “agreed” or “strongly agreed” that in transferring additional services to service providers, additional risk would be transferred as well.
Specific predictions for corporate real estate in 2010 are that:
- Ninety percent of the Fortune 500 companies will adopt “triple bottom line reporting,” which means that companies will be measured by social responsibility, environmental sustainability and profit.
- In the networked world of 2010, corporations will require less space to perform effectively. According to the Gallup Organization survey, right now just seven percent have workers spending 25-50 percent of their time in unassigned office space. By 2010, 21 percent of companies will have their employees working remotely up to half the time.
- The work environment will be defined more as connectivity a network of places both geographic and virtual—so that commercial real estate executives will manage networks as much as occupancy in facilities.
- Worker productivity will be measured in real time, thus allowing for real estate decisions to be made more quickly and more effectively. Portfolios will have to be flexible in terms of the contract, financing and the ability to substitute assets during the lease term.
Of the eight research teams just one is based in Europe. The teams were charged with defining research goals and hypotheses to be presented at CoreNet’s Global Summits this year. Ten in-depth industry research reports detailing the changing nature of business and the workplace will be introduced at the Global Summit in Chicago (15th – 19th May).
The research will also appear in published reports and feed into a set of diagnostic tools for use by senior corporate real estate and infrastructure leaders.
The European research team is also providing feedback on issues such as corporate social responsibility, sustainability and cultural diversity.
—Richard Byatt
Reprinted with permission; copyright 2004 i-FM
