We are seeing a big increase in the amount of outsourcing real estate, Jeffrey Schuth, international director, EMEA Corporate Solutions JLL

“Over the past 10– 15 years in the US we have seen a movement to outsourcing real estate, which continues to this day and is now in its fourth or fifth generation. In Europe we are currently in the first generation, the early stages of corporate real estate centralising in order to gain control of the real estate and make effective change happen. So we are seeing a big increase in the amount of outsourcing,” – says Jeffrey Schuth, international director, EMEA Corporate Solutions, JLL
“We are not seeing companies going in-house with these services, instead there is more outsourcing with strategic partners. They have lean efficient teams to manage strategically and up to the C-suite, and they are able to achieve efficiencies, innovation, best practices and the processes they need to operate in real estate. One of the first things we see companies outsource today is lease administration and data management. This is the foundation of what they do to drive value. They need data, they need analytics, they need to capture this information. From this they can effect the utilisation of space, portfolio analysis, and transactions around the real estate suited for the size of their portfolios and for making an impact on their workplaces. After this has happened you see transaction management – acquisition and disposition of space – as well as project management. In addition to this, there is facility management, which tends to be more difficult and requires more involvement from the facility management teams,” comments Jeffrey Schuth. "We have recently completed our survey of global real estate executives. This included almost 650 executives in 39 countries, covering Asia & the Pacific, Europe, the Middle East and Africa, and the Americas. It is the largest survey of corporate real estate executives of its kind and from this we have identified five key trends taking place today – the first of which is the increased focus and attention from the C-suite (that is the CEOs, CFOs, CIOs and COOs of organisations), who are placing key strategic demands on corporate real estate. Unfortunately, only about 25 pct of the corporate real estate executives feel adequately equipped to meet these demands. So they have been increasingly turning to (and this is trend number two) corporate real estate outsourcing. They are doing so to secure expertise leverage and global coverage. As part of this process, procurement is getting involved in a very big way. Seventy percent of our respondents said procurement is involved in the process. Unfortunately, less than 50 pct of these procurement teams have experience and knowledge of real estate, so there is the risk that they will falsely commoditise key strategic purchases, therefore diminishing the benefit the real estate is intended to bring,” adds Jeffrey Schuth.