Six Strategies for Asset Optimisation
Nigel Herbert of Turner & Townsend reveals six strategies to align property assets to corporate objectives.
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s your organisation missing out on potential benefits that can be made by linking property investment to corporate strategy? A new approach pioneered by Turner & Townsend is enabling organisations to do just that, prioritising and planning capital expenditure over large and diverse property portfolios. Asset management has
historically been the preserve of the infrastructure sector; organisations with a large, costly infrastructure base taking decisions on where to invest in order to get the best possible returns for their business. Now this approach is being
applied by companies with large and diverse property portfolios, spread around different global regions or business units. The legacy of the recent economic
downturn has resulted in an increased focus on getting a better return on investment. Companies also want to mark themselves out from the
competition. Managing and maintaining property assets in an effective manner, doing things differently and better, can act as a differentiator.
While many organisations take a bottom-up approach to asset management, this is intensive in terms of both cost and effort. Taking a more high level, strategic view of where to invest over the longer term should therefore be considered. Many organisations, especially those with large and diverse property portfolios are considering this approach. Here are some key factors to consider:
1 Understand the corporate strategy
Asset optimisation is not simply about property. It’s about how property can help a organisation meet its goals. In order to prioritise and organise its spend on property, an organisation needs to understand how any proposed or planned work will help it meet its core objectives. Typically, if a property portfolio is large and diverse, different people will be responsible for different parts of it, divided geographically or by business unit. Often, it’s a case
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of those who shout loudest get the finance. Though the decision-makers will require a convincing business case for the investment under consideration, how can they weigh that up against all the other possible investments and the impact they could have if they don’t have the full picture? There is almost always a total disconnect between those developing and acquiring properties and those responsible for maintenance. Different teams have different objectives and life cycle planning tends to fall between the cracks, and often just won’t happen. The result is that investment in
capital or life cycle maintenance is reactive and not proactive, with things only being replaced once they have failed. This is bad news for any organisation - a lack of pre- emptive investment ultimately costs an organisation more money and creates more risk.
2 Strategic assessment of portfolio
The challenge faced by most organisations is that they are effectively driving blind when it
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ASSET OPTIMISATION
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TURNER & TOWNSEND
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