Friction and Inertia: Business Change, Corporate Real Estate Portfolios and the UK Office Market.
Key Words: Corporate Real Estate; Flexibility; Business Change; Working
Practices; Appraisal; Office Demand
Abstract
It has been asserted that business reorganisation and new working practices
are transforming the nature of demand for business space. Downsizing, delayering,
business process reengineering and associated initiatives alter the amount,
type and location of space required by firms. The literature has neglected
the impact of real estate market structures on the ability of organisations
to successfully implement these new organisational forms or contemporary
working practices. Drawing from UK research, the paper demonstrates that,
while new working practices are widespread, their impact on the corporate
real estate portfolio is less dramatic than often supposed. In part, this
is attributed to inflexibility in market structures which constrains the
supply of appropriate space.