A part of corporate real estate management. Floor space requirement in office buildings

As owner-operated real estate is increasingly recognised as an important cost and production factor, senior management now pays considerable attention to this asset group, resulting in mounting pressure on Corporate Real Estate Management (CREM) to ensure the optimum management of properties. The two management concepts primarily used in Switzerland for this purpose are ìManagement by Objectivesî and ìManagement by Resultsî, which both operate with so-called core indicators. These key indicators represent the objectives which CREM must aim for. These objectives are, inter alia, defined by benchmarks. In addition to monetary benchmarks (e.g. operating costs per m2 of usable floor area), building economy (e.g. m2 of usable floor area per m2 of gross external floor area) and capacity benchmarks in particular (e.g. m2 of usable floor area per existing workplace) must be highlighted. These benchmarks form the focus of the present study. The aim was to determine the benchmarks for office buildings and to ascertain their drivers. The primary data collection from 116 owner-operated office buildings formed the basis of this study. We were able to demonstrate that the building economy can be assessed on the basis of the percentage share of usable floor area within the gross external floor area. The main driver of these building economy benchmarks for office buildings is the share of parking space for vehicles. This share has a negative effect on the building economy and must therefore be included in the formulation of differentiated benchmarks. When assessing the building economy based on the share of office space within the gross external floor area, any space designated for residential or recreational purposes as well as any storage, distribution or retail space must also be taken into consideration in addition to any vehicle parking space. These spaces also have a negative effect and need to be taken into account for the purpose of differentiation. Moreover, apart from building economy benchmarks, capacity benchmarks are also included as core indicators, which we have now been able to ascertain. Furthermore, it became apparent that capacity benchmarks are determined primarily by factors such as the space use management strategies, and only to a lesser degree by the building itself. When working with benchmarks as core indicators, clear definitions are necessary, as any comparisons made require, first of all, a uniform reference basis. This means that floor space and workplace definitions must be taken into account for the above benchmarks. However, it should be noted that any such benchmarks are solely a performance assessment criterion. In addition to benchmarks, other factors, such as staff satisfaction and the contribution of CREM to the shareholder value, must be emphasised. Ultimately, the activities of CREM must be in line with the corporate strategy which does not always provide for optimum building economy or capacity. Accordingly, for all that, CREM must comply with overarching corporate objectives.