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Discontinuity of Interest in Public Sector Property Asset Management: Budapest Case Study

This case study examines the discontinuity of interest at the operational level in public sector property asset management in Budapest, focusing on policy, strategy, and implementation. It explores the fragmented management structure, lack of transparency, and the need for a centralized organization to optimize the use and disposal of property assets.

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Discontinuity of Interest in Public Sector Property Asset Management: Budapest Case Study

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  1. PUBLIC SECTOR PROPERTY ASSET MANAGEMENTPolicy, strategy and implementation: discontinuity of interest at the operationallevel − Case study of Budapest" PAL BAROSS FRICS Assistant to the Deputy Mayor for Municipal Finance and Assets BUDAPEST MUNICIPALITY

  2. The „British experience”

  3. THE POLICY PROPOSITION

  4. MAGNITUDE OF ALLOCATION TO FUNCTIONS

  5. MY „PAST” AS A DEVELOPER

  6. MY OFFICE PROJECT

  7. OFFICE ENVIRONMENT

  8. MY „PRESENT” AS A PUBLIC EMPLOYEE

  9. “all and all it is just another brick in the wall...” Pink Floyd

  10. WHAT BUDAPEST CITY OWNS – AND WHY? 1. Land and buildings used to deliver a direct service to the public – for example, schools, health centers, elderly persons’ homes, residential units, public parks, cemeteries, ….. 2. Those that support service delivery in some way – most notably the town hall and other local administrative offices, vehicle depots…... 3. ‘Non-operational’ property – that is, property which is not used for, or in support of, mainstream service delivery. This includes commercial and industrial property and surplus property awaiting sale 4. Infrastructure companies….. and their property assets

  11. WHAT DO WE OWN? In terms of property types? (schools, libraries, swimming pools, community halls, leisure centers, office space, industrial space, flats, theatres, movie halls, hospitals, health centers …) NO IDEA In terms of values (price, operating costs, efficiency of use, environmental footprint..) NO IDEA In terms of legal structure of holding (freehold, condominium, contested ownership, rent…) NO IDEA In terms of budget allocation within the overal municipal budget what realistic savings to be achieved from rationalization, disposal or redevelopment. NO IDEA

  12. WHO MANAGES IT? There is a fragmented management structure of companies, agencies, committees, institutions, departments with un-transparent budgets, non-existent benchmarks, ad-hock decisions about use, disposal or refurbishment. WE HAVE NO IDEA HOW MUCH RESOURCES ARE TIED UP IN THE BUDAPESTMUNICIPAL PROPERTY PORTFOLIO

  13. OUR APPROACH PRIORITIES: • CREATE A MANAGEMENT INFORMATION CENTERD PROPERTY INFORMATION SYSTEM (CADASTER) • USE PROPERTY AS A SUPPORT FOR SERVICE DELIVERY • CONSOLIDATE PROPERTY MANAGEMENT FUNCTION IN A SINGLE ORGANISATION • ALL FUTURE RUNNING, MAINTENANCE, REFURBISHMENT OR DEVELOPMENT DECISIONS WILL BE BENCHMATKED AGAINST „ECOLOGICAL FOOTPRINT”

  14. OUR BUSINESS DISCILPINE • STRATEGIC ISSUES • ACCOMODATION REVIEW AND SPACE MANAGEMENT • PROPERTY INFORMATION • BUDGET MANAGEMENT • ENERGY MANAGEMENT • PROPERTY SERVICES • LEASE MANAGEMENT • BUILDING MAINATENANCE • VALUATION AQUISITION DISPOSAL REFURBISHMENT Asset management includes strategic considerations as well as a range ofproperty services. Dr. Gabor Bagdy MRICS, Deputy Mayor for Budget and Assets, Budapest

  15. ASSET KADASTER ADDITIONAL DATA OCCUPANT(S) CORE ASSET DATA SITE BUILDING TENANT AREA VALUATION LEASE TERM(S) CONDITION SURVEY USER DEMAND FOR IMPROVEMENT RUNNING COSTS SPACE USE BENCHMARK ENERGY USE BENCHMARK • ANNUAL PROPERTY REVIEW • PROPERTY COSTS • PROPERTY REVENUES • INVESTMENT BUDGET • DISPOSAL REVENUES

  16. SIGNIFICANT ASSET ISSUES SUSTAINABILITY PHYSICAL UPKEEP CASHFLOW VALUE FIT FOR PURPOSE USER/OCCUPIER

  17. WHERE TO PUT THE EMPHASIS SERVICE ORIENTED STRATEGY BUSINESS ORIENTED STRATEGY THE REAL ESTATE ASSET OBLIGATORY VOLUNTARY BUSINESS VACANT PHYSICAL UPKEEPFIT FOR PURPOSE CASHFLOW MARKET VALUE SUSTAINABILITY

  18. THE NEW MANTRA A building fit for the purpose, in the right location for users, can make the difference between a good and a poor service.

  19. THE THEATRE PORTFOLIO OWNERSHIP UPKEEP OBLIGATIONS OCCUPANNCY RIGHT

  20. USER MANAGED MODEL NO PROPERTY RENT + SUBSIDY FOR PROPERTY OPERATIONS

  21. „QUASY” ASSET MANAGER MODEL PROPERTY RENT + MORE SUBSIDY FOR OPERATIONS

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