Rightsizing Your Property Portfolio

Dec. 22, 2009 - PRLog -- Recent economic uncertainty has accelerated the pace of change, and the alignment of a property portfolio with evolving business strategies involves complex situations and difficult decisions.

A mismatch of property can be evoked by business drivers such as restructuring and downsizing, or legacy issues arising from mergers and acquisitions. This will impact on investment planning decisions and will lead to inefficient working practices and excessive operating costs - all of which are very visible on the balance sheet.

Rightsizing addresses this mismatch, which often begins with one of the following scenarios:

1.   Our property portfolio no longer matches our business needs
2.   We need to invest in our buildings and sites but we need to prioritise our spend
3.   We need to consolidate our asset base
4.   We need to plan for the future of our sites
5.   We have an inefficient layout
6.   We are not using our buildings or land effectively
7.   We have alot of under-utilized and vacant space in our buildings
8.   Our vacant space is costing us too much
9.   We need a more flexible way of working to maximize the efficiency of our buildings
10. We must reduce our facilities operating costs

The RIGHTSIZING APPROACH - every organization has individual needs and challenges, and these will impact on the property portfolio. Our approach ensures that our client's business needs are clearly understood and prioritized, using a consistent, objective and auditable process.

A simple strategic review may be a useful first step, providing clarity and enabling us to recommend a process which will identify the best solution. We use a 5 step scalable process to ensure an efficient business solution:

Step 1 - Data Gathering
Step 2 - Analysis
Step 3 - Optioneering
Step 4 - Facilitate Decision Making
Step 5 - Implementation

Elements that contribute to establishing the "Business Need"

1.   Business Drivers and Objectives
2.   Financial Constraints
3.   Timeline Implications
4.   Sustainability
5.   Existing Facilities
6.   Existing Workforce and Suppliers
7.   Essential Maintenance  
8.   Statutory Compliance
9.   Alternative Locations
10. Value for Money Criteria

A master planning approach is another helpful tool when considering a specific site or a portfolio of sites. Faithful+Gould manages the process and, in collaboration with other members of the project team, recommends the best route for an investment or divestment program to rightsize the asset base.

Our masterplan process incorporates the following key steps:

1.   Inception
2.   Site Constraints
3.   Site Opportunities
4.   Development Vision and Options
5.   Draft Masterplan
6.   Final Masterplan

Rightsizing adresses operating costs as well as capital costs. A maximum footprint value is desirable, but ill-defined and unsustainable cost cutting initiatives may put core business-critical operations at risk. Getting the balance right is not easy.

The Faithful+Gould rightsizing model is a valuable tool which helps overcome this conflict. The model enables any organization to set, optimise and manage sustainable budgets. It assesses and compares the facilites, using six facets:

1.   Space Utlization
2.   Functional Suitability
3.   Safety, Security and Compliance
4.   Environmental Management
5.   Physical Condition and Remaining Life
6.   Lifetime View (5 year rolling view)

The knowledge captured provides a baseline position for the performance and cost of the current facilites model. It also identifies specific actions required to maintain the facilities to appropriate standards over the future lifetime view. We have achieved considerable benefits for our clients though the use of the Faithful+Gould rightsizing model.

Savings and Improvements

1.   Improved Space Utilization
2.   Rationlization and Consolidation of Space Which Frees Up Saleable Assets
3.   Savings in Operating and Maintenance Budgets
4.   Increased Energy Efficiency and Reduced Carbon Emissions
5.   Overall Reduction in User Changes

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Rightsizing is a specialist service offered by Faithful+Gould.

Faithful+Gould has a global team of property and facilities management professionals with comprehensive experience of asset maximization. We can advise on how best to align an asset/property portfolio to meet the organization's needs and how to reduce both capital and operating costs of the facilities and maximize the value of the redundant assets.

We understand that organizations vary in their in-house property expertise. We work alongside clients' portfolio and facilites departments where appropriate or we can take the lead if required.

We have achieved effective results for a diverse range of clients in a variety of sectors. Many of these clients are major players within their fields, and our team has been able to provide sector-specific experience alongside a full range of professional rightsizing skills.