Corporate real estate portfolio management: A strategy- and sustainability-based approach for heterogeneous industrial portfolios

Abstract

Corporate real estate management (CREM), much more than traditional real estate management, has to deal with very heterogeneous real estate portfolios. Administrative, research, production and logistics activities require various asset classes with a very different complexity showing different characteristics, conditions and levels of importance to the user, ie the core business. Even so, they often lie within the same CRE manager’s responsibility and also need to be treated with the same level of professionalism. As a result, the CRE manager is commonly confronted with an intransparent allocation of funds for building maintenance and upgrades and an ageing building portfolio. It is up to the professional CRE manager to establish transparency in his portfolio and incorporate schemes for the most reasonable allocation of the typically limited funds for building investments. Hence, it is the aim of this paper to introduce an approach for CRE portfolio management which combines both the business-driven strategies for building assets and a strong sustainability aspect in assessing the building portfolio from a real estate perspective. It builds on a preceding paper, published in Corporate Real Estate Journal, Volume 3, Number 1, pp. 10–23 (2013). Therein the overall concept of a sustainable CRE portfolio management is described, including selection of sustainability criteria and analysis of building conditions. This paper focuses on how to prioritise important and unimportant buildings and is supplemented by a case study.