Key Real Estate Cost Indicators (part 2)

Space Productivity Analysis

The productivity of accommodation (how it is used) is as important as the lease terms. How properties compare to market and industry averages can show strengths and weaknesses. These figures can be used to with the cost figures to produce Key Occupancy Cost Indicators

Cycle Analysis

Property holdings tend towards having a cyclical nature, dictated by lease terms. Whilst this works well if the occupancy cycle is at a similar point, problems can occur where they become out of sync.

By understanding the property cycles and occupancy cycle better planning can be made to utilise flexibility within the lease.

Summary

It can be seen that these 4 Key Cost Indicators incorporate a lot of information but between them can give a high level overview of performance of a company s real estate in relation to the market. They provide a snap shot of where a portfolio is and the scope available for increasing performance. They also help raise alerts as to upcoming critical action dates which in themselves can be a trigger for change and improvement.

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