Challenges and Potentials of Bundling Real Estate Functions in German Companies

After a primary intensive debate in the 90th, discussions about Corporate Real Estate Management (CREM) issues - except of the introduction of REITs - have largely disrupted in Germany. Moreover the ongoing professionalizing process of real estate functions in German companies came largely to halt. In contrast a lot of CRE Managers still assume considerable potentials in raising efficiency. The prerequisite of realizing these potentials is seen in widening the mandate of CRE units onto all real estate functions and corporate property.The aim of this paper is to analyze the main drivers, perspectives, and results of bundling real estate functions in one centralized CREM unit. Via expert interviews in twelve chosen best-practice companies, mainly from the industrial sector, the developments of CREM in Germany over the past 15 years are compared. The study shows the main causes for bundling real estate functions, the primary prospected potentials, and the conversion process from a decentralized facilities caretaker to a centralized real estate service provider. Furthermore resistances of business units CREM has been faced with during the bundling process and how to solve them are emphasized. The main achievements and average savings in occupancy costs as a result of bundled real estate functions, untapped potentials, and measures to be taken into action to tap these potentials are presented, too. Additionally the organizational implementation of CREM units within the company is shown. An outlook on further steps to be taken to fulfil the requirements and needs of both shareholders and occupiers is given.