Virginia Gibson
Working Papers in Land Management and Development 04/00
pp. 16
Key Words: Corporate real estate, office space, decision-making.
Abstract:
Firms are faced
with a wider set of choices when they identify a need for new office space.
They can build or purchase accommodation, lease space for long or short periods
with or without the inclusion of services, or they can use “instant office”
solutions provided by serviced office operators. But how do they evaluate these
alternatives and are they able to make rational choices? The research found
that the shortening of business horizons lead to the desire for more office
space on short-term contracts often with the inclusion of at least some
facilities management and business support services. The need for greater
flexibility, particularly in financial terms, was highlighted as an important
criteria when selecting new office accommodation. The current office portfolios
held were perceived not to meet these requirements. However, there was often a
lack of good quality data available within occupiers which could be used to
help them analyse the range of choices in the market. Additionally, there were
other organisational constraints to making decisions about inclusive real
estate products. These included fragmentation of decisions-making, internal
politics and the lack of assessment of business risk alongside real estate
risk. Overall therefore, corporate occupiers themselves act as an interial
force to the development of new and innovative real estate products.
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