How corporate real estate data could drive profitability in Singapore

No one doubts the value of good data. It can transform enterprises, informing their marketing, their procurement, their production techniques – in fact, their entire strategic direction.

But in the corporate real estate (CRE) sphere, the potential of management data is possibly less appreciated than it should be. Yes, finance departments appreciate the value of market data, and of data like cost per square metre and cost of occupancy. But in many instances the management and operational data they track does not reflect changes in the way people work. Businesses are missing opportunities to improve performance.

In 2011, Regus published a report by two highly-respected academics, Barry Varcoe and Martha O’Meara, on how best CRE practice correlates to company success.[1] The report analysed forty Global Fortune 500 companies, with a total operational portfolio size of 221 million gross square metres.

One key finding of the report is the correlation between company performance and CRE data. The authors found that a well-developed operational and management data practice correlates positively to return on assets (RoA) and return on equity (RoE :) a 25% improvement in management information practice relates to an addition of 0.82% to an organisation’s RoA, and of 1.77% to its RoE.

Most people realise the link between data and performance: the ability to make better decisions relates to better returns on resources. But the Varcoe and O’Mara research is ground-breaking in that it quantifies the benefits of good CRE data. In turn, it encourages companies to explore what good data entails.

Traditionally, property departments think in terms of average cost per square metre, rather than how space is used. But as employees become more mobile, traditional corporate space sits un-used for some of the week. Companies know this, but they may not measure it.

According to Regus research, 58% of staff in large organisations predict that future workstyles will lead to a decrease in the need of office space.[2] The question is: which space?

As well as cost per sqm, and average cost per employee, companies need to measure the average time that workstation sits empty; the proportion of vacant vs occupied space, and so on. As companies expand geographically, it becomes harder to track such data, but, with mobile working on the rise, it becomes more important to do so.

With a clearer picture of how staff use workspace, companies can make better informed decisions about their requirements for physical space. They can provide the workspaces and facilities that staff actually need; they can cut wasted travelling time; they can boost productivity.

That use of CRE management data goes far beyond calculating the costs of real estate. Instead, it can help a company improve the very performance of its assets – not just its physical assets but its people as well.

For more information on Varcoe and O’Meara’s report, Corporate Real Estate Impact on Enterprise Success, go to this link.

William Willems, Regional Vice-President, Regus Australia, New Zealand and South-east Asia