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Are you thinking about the needs of your clients?

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It is tempting to inflate the feasibility of a property based on market trends. In the absence of a proper evaluation those in the real estate industry misjudge the needs of their clients. 

According to Colliers International Canada's Vice President of Client Strategy Kate Hay this is the "Achilles' heel" of the sector. 

"We most often ignore the underlying needs of the businesses we serve, choosing instead to focus on expiration dates, net rents and expansion rights," she commented. 

Ms Hay says a key change that has occurred in the industry is that clients are now consulting with specialists who advise them on the nature of the real estate that will be best suited to their business objectives. 

Choice of premises is now becoming a part of corporate strategic planning. 

Researcher Anna-Liisa Lindholm and her colleagues from the Helsinki University of Technology conducted research that defines how between corporate real estate strategies link with operating decisions to core business goals. The work came to be known as Lindholm's Model. 

According to the model, solid real estate planning can have the effect of improving the marketing and sales function, increasing innovation, employee satisfaction, productivity and flexibility in operations.

Colliers International reports that around 30 percent of non-real estate companies have a formal real estate strategy, although figures do vary across the board.

Ms Hay goes on to comment that commercial real estate specialists should help corporates create a strategy.

Instead, she says, they are provided with schedules, deadlines and "negotiation tactics". This creates a sense of urgency and the nature of decision making is largely "reactive". 

"This cycle of neglect-urgent need-reaction-neglect repeats itself endlessly within a company until it is broken by the development of a true corporate real estate strategy," she added. 

Date Published: 30 Jun 2015
Category: General News

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