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UK plc is sitting on £28.5bn untapped property resource

The British Council for Offices (BCO) has today called for businesses to take off the boardroom blinkers and unleash potential of their property to benefit their organisation’s overall performance.

The office sector membership organisation has today published research carried out by the Centre for Economics and Business Research (Cebr) and Populus, revealing that UK plc spent an estimated £28.5 billion on offices in 2012 – outstripping business expenditure on legal services (£23.8bn), accounting (£14.7bn) and insurance services (£22.3bn).

Of the estimated £28.5bn spent on offices in 2012, rent accounted for almost half of this cost at £13.6bn whilst rates were a fifth at £5.6bn. The remaining £9.2bn consisted of furniture, repairs and facilities management

However, despite this expenditure, nearly three fifths (57%) of the 250 senior executives from large organisations surveyed said property issues were not regularly discussed in the boardroom and responsibility for property is still likely to fall outside management teams.

The survey found signs that businesses are starting to wake up to the potential business benefits that office space can deliver but still take a very cost-centric view towards the workplace. Despite the fact that almost three-quarters of organisations reported that they were constantly analysing and assessing whether their space is being used efficiently, cost was found to be the most important factor in assessing the office’s performance (73%).

With 68% of organisations surveyed likely to review how their office space is used in response to organisation growth or investment, the BCO believes that there is a significant opportunity as economic recovery accelerates over the next few years for businesses to start to see property as having the potential to bring significant benefits to their overall performance.

While staff retention and productivity were recognised to be important factors in assessing the performance of office space, those surveyed admitted to failing to look at the role of office space when productivity dropped (40%), recruitment and retention levels fell (39%) or when staff morale fell (27%).

Richard Kauntze, Chief Executive of the BCO, said:

“Property is a significant expenditure to UK plc, but is typically seen as no more than that. What is often overlooked is that it is also a very small proportion of the overall cost of running most businesses when contrasted with the cost of the pay roll.

“What many businesses don’t understand is that by using property efficiently, treating it as a resource to be optimised, it can deliver tangible benefits in employee performance through increased productivity and wellbeing. Businesses shouldn’t wait until costs need to be cut before reviewing their office space – it’s important that they look at how to get the most out of it like any other expenditure. This is why we believe management boards need to recognise that property merits greater attention.”

 

 

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