Corporate real estate refers to the land legally owned by any corporation, along with all permanent fixtures on the land. This is a term found in common law, established through the courts, and drawn from various courts. It can be safely assumed that based on the general valuation approach adopted by corporations today, real estate covers more than 30-40% of a corporation’s capital assets. The amount spent on real estate is also next in terms of investment made by a corporation after staff maintenance expenses. As a consequence, this aspect of management receives a very high priority in the development of strategies to increase the value of the company.
High-quality real estate management plans in the corporate sector should include not only functional facilities and other land, but also focus on expendable and unused property. Redundant building locations have found their way into corporate real estate asset utilization strategies. With space claiming such a large percentage of funds, it’s natural to find buildings and vacant land marked with importance on a company’s balance sheet.
The plans developed in the past in this area have always focused on representing the value of the company as well as enhancing the latent value of the organization in operational reality. But in recent developments, many companies have drawn up plans to do the same using land and non-operational objects in addition to regular corporate real estate management schemes. It must be understood that real estate is not an asset to be used only in difficult times. You have to use resources but also reduce costs, increasing profitability as much as possible.
In ‘The Components of Corporate Real Estate Management’, Oliver Breitenstein, Alexander May, Friedrich Eschenbaum say that “The goal of CRE is to make a return on real estate without changing the main branch of a business.” Here, the decision makers of the company have the responsibility to control the organization operations of the company real estate, which are carried out in a decentralized way and using external service provider companies. The real estate portfolio has two sections. First, the fungible land will be sold to generate income or set aside to be considered for project implementation. An internal rent will then be introduced on operating plants and buildings after assessing market conditions.
This portfolio is worked and optimized. Also, there should be a strong focus on cost optimization which will lead to cost reduction.
Similarly, there are many ‘commandments’ on corporate real estate management that can be studied and evaluated with respect to the organization’s current state, value and real estate potential.
External service companies can enter the scene for the efficient exploitation of real estate assets, the disposition of non-operational real estate, the planning and implementation of real estate cost optimization procedures and, finally, to ensure an adequate level of transparency. in the corporate real estate portfolio. Such a plan will help the organization and ease the burden that other organizational expenses bring, while helping the other strategies to achieve business objectives.
