Asset allowed to lie idle

Posted On Thursday, 04 September 2003 02:00 Published by
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Corporations tend to show little interest in the property they own or lease
By Ian Fife

Corporations tend to show little interest in the property they own or lease, though if they took the trouble, they could probably cut costs by 20%.

This is the finding of a survey of European companies by consultants Ernst & Young. The report concludes that, though 80% of the companies surveyed were trying to reduce costs and real estate was an issue raised at board level in 60% of them, they did not focus much on it.

The report also found that:

  • Thirty-seven percent of companies surveyed had no management database of real estate, and 55% had no formal corporate property strategy;
  • About 18% of respondents had not carried out property-related initiatives in the past year, and 31% had no intention of doing so in the next; and
  • When asked how they would use their corporate property to add value to operations, 52% of respondents said they did not know, or would do nothing. More than 50% admitted to having "poor" knowledge of real estate.
Francois Viruly of economists Viruly Consulting suspects SA corporates are even worse, but "government is advanced in property asset management".

Financial Mail

Publisher: Financial Mail
Source: Financial Mail

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