The application of a benchmarking concept

Abstract

PurposeToday, the occupancy cost of owner‐operated property is the second or third largest cost factor for many companies. Benchmarking projects that focus on occupancy cost comparisons are, therefore, becoming increasingly important. Such projects must contrast comparable properties since the comparison otherwise cannot produce meaningful results. The paper aims to focus on the issues involved.Design/methodology/approachAn occupancy cost benchmarking concept is explained using the example of a Swiss portfolio of office buildings used for own operations. The chosen approach works primarily with known cost drivers that are used in the selection of suitable benchmarking properties.FindingsThe benchmarking concept enables the benchmarking of comparable properties. In addition to a pure benchmarking, it also allows the reasons for cost differences between the properties under consideration and the specific benchmarks to be identified. Recommended actions can be derived from the comparison.Practical implicationsIn support of future benchmarking projects, it will be necessary to expand the existing database and to analyse it with the aim of identifying additional cost drivers.Originality/valueThe concept discussed in the paper can be translated to other areas of application (for instance area benchmarking).