Implementing an effective property management strategy can make financial savings

Property-related outgoings are usually the second largest cost for every organisation in the education sector – after employee expenditure. It means a smart responsive property management strategy offers significant potential cost savings as well, as opportunities to augment current revenue streams.

David Merton of property consultants Fisher German believes that a holistic and strategic approach to managing the property estate can have a profound financial and strategic impact on finances, as well as maximise identified opportunities and minimise risks and liabilities.

“The education sector has traditionally approached property management on a ‘needs must’ or ad hoc basis, despite it representing one of the largest outgoings.

“This is understandable given the fact that people join the education sector to make a difference and act as a catalyst for forming minds – not mange buildings and land” commented David Merton.

“But, escalating costs and shrinking resources are forcing many Team Leaders to re-think how they save costs, ‘sweat assets’ and optimize how space is used. In short, re-think how they address the intricate and seemingly insoluble financial challenges, they face.”

However, there is no silver bullet. Evolving the following five cost streams can help and, what’s more, will have little impact on the quality of education provision:

  • Business Rates: are the Rateable Values of the properties occupied, correct.  Over the last 10 years, we have worked with over 250 schools and colleges and successfully appealed their liabilities – which, in some cases, generated savings of up to 50%
  • Energy Efficiency: whether the objective is to reduce energy waste or, opt for renewable energy approaches to generation to reduce costs, what are your options and how viable are they for you
  • ‘Asset’ Optimisation: are there any buildings which could be sold, let, repurposed or, are there rents which could be renegotiated and/or leases regeared
  • Development: could buildings be reimagined for alternative use, to generate additional funds
  • Strategic ‘Estate’ Planning: when was the last time the ‘estate’s’ strategic property plan was reviewed. Are the agreed strategies still appropriate/relevant. How successful were they.

David added: “There is no one-size-fits-all solution. If Leadership Teams work with property specialists, it is possible to make successful changes – such as develop an outline strategy; review, refine and tailor it; cost the agreed plan; and implement it.”

The process is relatively straight forward and comprises:

  • Briefing: start with an in-depth conversation with the specialist property team to ensure they understand:
    1. The challenges you face
    2. Your (property-related) plans and ambitions
    3. What has been considered before and, either its current status or why it was not progressed
  • Audit: a physical ‘walk-about’ of all the buildings, complemented by desk research where relevant, to ascertain the opportunities and potential liabilities
  • Recommendations: based on the analysis of the audit conclusions, the consultants will present a detailed, tailored and costed set of recommendations for discussion with the Leadership Team
  • Plan: the discussion and post-discussion process inevitably leads to a plan – underpinned by priorities which are aligned to your ‘bigger picture’
  • Implementation: irrespective of which group of specialists is involved in the implementation of the agreed plan – Business Rates, Planning, Building Consultancy, Property Strategy, Acquisition & Disposal, etc – the multi-disciplined team must work as one team, delivering one plan, to achieve one goal/set of goals
  • Post-Implementation:  accountability is key. Did the consultants do what they said they would, within the agreed budget and achieve the desired result. Sometimes, the implementation period will take longer than a few weeks/months – for example, if it is a development initiative
  • Strategic Reviews: for some, when the agreed plan is implemented, the job is done. However, many Leadership Teams have started to prefer a regular/annual strategic review as their circumstances change, their requirements evolve and new opportunities emerge.

David concluded: “This indicative approach addresses the typical concerns we hear from Leadership Teams. The truth is a viable and well-thought through strategic plan can save money and optimise long term prospects.”

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