Success factors and decision making process for partnership models in project development. A case study on value-added partnerships in the private sector

Abstract

In this paper we are analysing the project development process from a corporate point of view. If corporates are not able to rent an existing property or if leasing seems to be inefficient, corporates are often the initiator of office developments. There is a lot of evidence, that if real estate development not belongs to the initiator’s core business, it is a very complex and difficult task to undertake. Previous studies show that especially setting effective objectives and making efficient decision in the planning process, institutionalising the project and project controlling are critical tasks in the development process for corporate real estate managers.Applications in the public sector – called Public Private Partnerships (PPP)– show that value-added partnerships can be the most efficient sourcing option especially for new developed office spaces depending on the individual situation. However up to now, from a corporate user’s point of view neither the impact of the typical PPP success factors nor the probability of occurrence of the risks of this sourcing option based on partnership are examined and clarified.Consequently, the purpose of this paper is to evaluate the value-added partnership from a corporate point of view. Therefore in a first step we are targeting to derive valuation criteria for the corporate real estate sourcing process from the conditions and framework in projects. In a second step we compare the value-added partnership sourcing model with the traditionally used models and develop a system of decision criteria. This system should take all conditions, influence factors and specific project situations into account. In a third step we finally develop a decision making process to select the sourcing model, which meets the individual frame conditions best.The case was a substantial office development project based on partnership of one of Germany’s largest companies. We created a 360 degree shareholder feedback by applying state of the art empirical social research methods and with performing a software based (MAXQDA) qualitative content analysis.The paper provides a theoretical decision framework of real estate developments in a sourcing context. For practitioners we provide a decision support tool to find the most efficient sourcing model for a development project in an individual situation and the tool will facilitate to identify potential development projects, which will meet the requirements of value-added partnerships.