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CREM 2010: How important is the user? - Importance of user-orientation in Corporate Real Estate Management -

CREM 2010: How important is the user? - Importance of user-orientation in Corporate Real Estate Management -. Andreas Pfnür Sonja Weiland. ERES Conference 2010 in Milan, Italy, June 23-26, 2010. 1. Agenda. Motivation and aims of the survey. Method. Survey results. Conclusion. 2. Agenda.

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CREM 2010: How important is the user? - Importance of user-orientation in Corporate Real Estate Management -

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  1. CREM 2010: How important is the user?- Importance of user-orientation in Corporate Real Estate Management - Andreas Pfnür Sonja Weiland ERES Conference 2010 in Milan, Italy, June 23-26, 2010 1 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  2. Agenda Motivation and aims of the survey Method Survey results Conclusion 2 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  3. Agenda Motivation and aims of the survey Method Survey results Conclusion 3 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  4. Background situation and motivation Corporate real estate between owner-function and user-function: a more rival than complementary relationship After the economic and financial crisis a change in German CREM could be observed • the corporate real estate portfolio had no stabilising effect for the financial situation of the company • now the real estate assets and the real estate management processes are critically analysed for efficiency • We assume: CREM is more focused on objectives introduced by the users 4 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  5. Aims of the survey The main aim of the survey was to verify: • Became the user less important in German CREM in the recent years and is this trend turning now? • Is there a relation between outsourcing of real estate-related functions and user-orientation in German CREM? For reaching this main aim the following questions were examined: • Which relevance is ascribed by the CREM to the user-function of real estate compared to the owner-function? • What is the status quo of user-satisfaction actually and how is it measured and controlled by the CREM-Unit? • Is there a correlation between user-orientation and sourcing decisions? [just an extract of the questions] 5 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  6. Agenda Motivation and aims of the survey Method Survey results Conclusion 6 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  7. Research design – concept and basic conditions Sample: • target companies: major enterprises with more than 10.0001 employees (relevance criteria) • interviews had an average duration of 23 minutes • 184 German companies were invited to participate in the study • 97 usable datasets, which equate to a response rate of 53 % Method: • a questionnaire survey was chosen as the method of data collection in German companies • data was collected by Computer Assisted Telephone Interviews (CATI) by a professional team of market researchers • the senior executive in charge (Head of CREM, Director of CREM, SVP CREM) responded to the questionnaire Analysis (status quo): • univariate and bivariate descriptive data analysis (e.g. frequency and correlation) • visualisation by TOP-2-Boxes and BOTTOM-2-Boxes 1Data version: TOP 500 companies (2008), TOP 50 banks (2007) and TOP 30 insurance company (2007) from Axel Springer AG / WELT GRUPPE Ullstein GmbH/ Berliner Morgenpost 7 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  8. Agenda Motivation and aims of the survey Method Survey results Conclusion 8 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  9. Importance of real estate as resource is underestimated Asked for current main objectives of the CREM:  Against this background increasing user- and service-orientation would be relativized 9 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  10. Leverage effect of real estate management to increase labour productivity is underestimated Asked for the average enhancement in labour productivity by an improved provision of real estates and services difference to status quo: A high abstention from voting indicates uncertainness. An other question shows: 82.5 % of the surveyed persons of charge estimate that users productivity would increase with higher workplace satisfaction.  There is a lack of knowledge about the effects of real estate to labour productivity 10 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  11. Real estate finance themes comparatively seem to be a minor challenge Statements of the respondents when asked for … … the current challenges of their company: …the current CREM objectives: Just 52.6 % respondents estimate that CREM could contribute to the company success by implementing compliance. creating shareholder value and fulfilling the requirements of capital markets 11 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  12. User-function currently predominates owner-function Asked for the agreement with this statements: • Importance of the user-function is growing: In 1998 the relationship between owner-function and user-function was 50:50 12 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  13. User-orientation and user-satisfaction could be upgraded – part 1 Our CREM could influence the company's success especially by... Self-assessment: • 85.6 % estimate that they are working user-orientated 13 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  14. User-orientation and user-satisfaction could be upgraded – part 2 Further self-assessment: • 54 % assume that their office space users are satisfied with the fulfilment of their space-requirements • 56 % are using instruments to analyse the user satisfaction • Reasons: • minor appraisement of benefit by person of charge or the top management • unavailable human resources 14 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  15. Outsourcing motives should be rethought • most outsourcing-potential is seen in the technical and infrastructural facility management (33 %; 29 %) • the least potential is seen in the specific key functions like assessing the needed land and space or portfolio management  unchanged in the last years1 • if outsourcing is intended service providers are used especially for technical FM • commercial FM often remains in-house (41,7 %) (e.g. subsidiary company) 1see also Pfnür/Hartmann/Pärssinen 2008 15 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  16. Agenda Motivation and aims of the survey Method Survey results Conclusion 16 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  17. Conclusion • an overemphasis of the owner-function by the real estate management leads to a misallocation of resources: the main aim of an optimal support of the core business would be missed • the results in common demonstrate:  user-function become more important in German CREM but the implementation (measurable by the degree of satisfaction) is not completed jet • User-orientation is a main aim but not realised practically • User often perceive the CREM as part of financial management • Simultaneously  there is a lack of job completion on location: the current real estate stock do not fit completely the requirements of the users. Therefore the satisfaction of the users and labour productivity can not further be increased by real estate. proposal for solution 17 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  18. Conclusion 18 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  19. Thanks for your attention! Dipl.-Wirtsch.-Ing. Sonja Weiland Institut für Betriebswirtschaftslehre FG Immobilienwirtschaft und Baubetriebswirtschaftslehre Technische Universität Darmstadt Hochschulstraße 1, 64289 Darmstadt Tel. +49 6151 16-4705 Fax +49 6151 16-4417 E-mail: weiland@bwl.tu-darmstadt.de http://www.immobilien-forschung.de 19 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  20. Backup 20 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  21. Balance of sectors 21 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  22. Real estate portfolio 22 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  23. Lion`s share of the portfolio in Germany 23 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

  24. Major influence by top management • Competence for decision making by top and middle management is predominant • In spite of the stated objective of achieving users requirements the users have comparatively a minor influence on CREM 24 25.06.2010 | TU Darmstadt | Research Centre for Real Estate Business Administration | Andreas Pfnür und Sonja Weiland

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