Value creation through the management of corporate real estate

Abstract

Traditionally performance of real estate portfolios is either measured by internal rates of return or to costs per square meter (or per FTE). An increasing number of corporations have during the last couple of years been focusing on introducing performance metrics based on shareholder value. Although the popularity of value based management changed the corporate metrics the contribution of real estate is still measured by cost reductions or capital minimisation. It is seldom that corporations proactively benefit from other, non‐financial, effects resulting out of professional real estate management. The objective of this paper is to highlight the value of managing corporate real estate and its contribution to the performance of a corporation both in a financial and non‐financial manner.