July 27, 2007—Businesses in the UK are wasting up to £18 billion a year through inefficient use of their property, according to a new study sponsored by Fasset, a business and property solutions specialist. Fasset currently manages nearly 1.2 million square feet of facilities and business space in the UK for 21 companies employing 5,700 people.
The report shows that many UK finance professionals are missing opportunities to increase profit because their property portfolio strategies are not coordinated with their business strategies. Fasset asserts that property should have a higher profile in the boardroom since it is the second highest expense in most businesses, after salaries.
The study by the University of Portsmouth states, “Many companies are missing opportunities to reduce cost and enhance performance because they give limited attention to managing their portfolio. This lack of understanding in boardrooms of the contribution of property to financial returns and shareholder value means that companies may in some cases be damaging their financial performance—and with it shareholder value. A sense of resignation may be created by long leases, which are still very common in the UK. Research shows dissatisfaction with long leases and a strong preference for more flexible arrangements with landlords.”
Fasset sponsored the study, titled The Significance of Flexibility, to explore returns on investment issues with property and facilities managers. Consultations were held with 12 managers with in-depth experience of property and facilities management across industry sectors.
Chris Allington, Fasset’s joint managing director, says, “It’s one of the ironies of business life that a company will waste time negotiating with a supplier over a few hundred pounds while ignoring the fact that they could develop occupation strategies that will deliver millions of pounds of cost reductions.”
“Property management has a lower profile than it deserves, particularly at boardroom level, and our experience is that some companies are unwittingly wasting up to 50% of their property and facilities management budgets simply because of the design and implementation of their property portfolio. The key to businesses maximizing their property portfolio is flexibility and utilization, as our own clients will vouch. We held a round-table seminar where it was revealed that research among 250 blue chip companies found that less than a quarter had discussed property at board level in the past ten years.”
