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News Release

London

Jones Lang LaSalle redefines corporate real estate landscape

Latest study identifies four organisation models for successful corporate real estate departments


18th April 2011 - Jones Lang LaSalle research reveals that today’s Corporate Real Estate (CRE) executive is being challenged to support an increasingly complex array of corporate initiatives.  These include global expansion or contraction, sustainability, winning the war for talent, speed to market, cost reduction or avoidance and enhancing operational efficiency.

Mike Napier, Executive Vice President, Real Estate, Business Service Centres and Corporate Travel, Royal Dutch Shell plc, said; “A greater focus on strategy has helped CRE get closer to the core business and communicate the value proposition of real estate more effectively.”

Shelley Frost, Director in Jones Lang LaSalle’s Corporate Solutions team, said; “The onus is being placed on CRE teams by their core business to adapt to the evolving corporate landscape.  A leaner, more effective team structure can improve business alignment and reduce cost – demonstrating the full value of the CRE function to the wider business.  However, this evolution will require a fundamental reassessment of team structure, roles and skills, essentially the entire CRE model.”

Shelley Frost continued; “Designing the appropriate CRE model has to take a range of factors into account, as each organisation operates in a very different ways.  In each case there are common factors which need to be addressed.  Alignment with the core business is the most fundamental of these, as without this the structure cannot be truly effective.  In addition to this core concern, the size of the team and the skills required of it depend upon a range of key factors.”
Jones Lang LaSalle’s research identifies these factors as follows:

• Objectives and targets set by the board
• Complexity of the real estate portfolio
• Existing mandate and remit of real estate team
• Composition of the core business
• Manner and frequency that the real estate function intends to interact with the business
• Number of stakeholders and their input into real estate decisions
• Mandate and remit of any outsource partner
• Level of management of the partner contract
Only once these factors have been assessed and clarified, can examination begin of the most appropriate organisational structure to adopt. 

Shelley Frost added; “Reshaping the CRE team structure can be a challenging process.  However although the benefits can be great, the length of time such a change can take should not be underestimated.  Nor should the potential challenges be overlooked, particularly in terms of skill sets and realigning people within new structures.”

Shelley Frost concluded; “When it comes to choosing the right CRE organisational structure, there is no single, standard template that can be applied regardless of company size and structure.  There is, however, an evolution in best practice.  Those CRE organisations that adapt and reflect this evolution will be best positioned to reap the rewards of a more effective and strategic function more closely aligned to their core business.”