Is corporate real estate

Abstract

Purpose - The purpose of this article is to provide an overview of the way that corporate real estate (CRE) has developed in the UK since the early 1990s. Design/methodology/approach - Review of how various professional bodies, occupiers and landlords have responded to the changing business and workplace environment. Findings - CRE managers and the professional bodies that represent them are at a crossroads. Whilst the business world has evolved since 1990, the CRE sector has not and faces the prospect becoming purely a technical rather than a strategic subject. Originality/value - A review of what has happened and not new research. Keywords Facilities management, UK, Corporate real estate, Strategic view, Professional bodies, Corporate real estate managers Paper type Viewpoint 1. The evolution of corporate real estate The recession of the early 1990s in the UK resulted in a large amount of unlet commercial property as a consequence of the late 1980s development boom. This was added to by a large quantity of space that had suddenly become surplus to the requirements of corporate occupiers, who were now downsizing. Into this mix arrived two largely unknown corporate real estate (CRE) organisations from the USA: IDRC and NACORE (merged in 2002 to form CoreNet Global). This was the time, two decades ago, when CRE emerged as a distinctive area of professional activity within the property industry. What distinguished IDRC and NACORE from the prevailing approach to property in the UK and Europe was their focus on operational property, or CRE management. Up to this point, the approach in Europe was a more traditional asset management one, resting on the cornerstone of the Landlord and Tenant Act 1954. In Europe, the concept of "property" as an asset was, and largely remains, paramount, whereas the new pretenders sought to shift the focus to managing physical resources as an integral part of operational need. Their outlook encouraged many occupiers to shift their perception of property from "a necessary evil", to regarding it as one of the three most important business resources, alongside people and technology. The arrival of CRE coincided with the rapidly increasing globalisation of business and the development of information and communications technology (ICT) and the Internet with their manifold implications for business processes and trade. Business was beginning to move fast; demands on space started to change more frequently and occupiers began to place different emphases on their needs for property. As a