Back to the future : Changing business priorities have accelerated trends and are driving fundamental shifts in the structure and approach to corporate real estate outsourcing

Environmental, social and governance (ESG) trends over recent years have driven stronger alignment of corporate real estate (CRE) management with core business transformation. Stakeholder expectations for demonstrable change are necessitating business to respond to issues at an unprecedented pace. The intense C-suite focus on purpose and accountability is demanding a reset of CRE management. Digital transformation is seen as key. ESG initiatives have caused C-suite executives to become more aware of the strategic value of CRE management. No longer viewed as a cost centre focused on cost reduction, the mandate for CRE management is to deliver value, cost efficiency, continuous improvement and innovation. Fast-paced change and the need for agility has challenged the status quo of outsourcing. New technologies, automation and shared economy models have resulted in insourcing and demand for change. The cost of inflexible and inefficient ‘self-performance’ facility management (FM) outsourcing principal contracts presents market opportunity for disruption. CRE management requires more choice and very different, flexible models. When CRE outsourcing began over 20 years ago, models varied but were highly flexible and advancing as highly strategic. Service models devolved from strategic partnerships to contracted suppliers. Technology advances necessitate a look back to the more client-centric, strategic, flexible models of the past.