Citation
Cooke, H. (2014), "Editorial", Journal of Corporate Real Estate, Vol. 16 No. 3. https://doi.org/10.1108/JCRE-05-2014-0012
Publisher
:Emerald Group Publishing Limited
Editorial
Article Type: Editorial From: Journal of Corporate Real Estate, Volume 16, Issue 3
Within this edition, there is a general theme of decision-making running through the four papers. These range across decisions on the amount of space taken, the impact of lease accounting changes on strategy and hence decision-making, the approach to decision-making and the impact of life cycle costs on choices and therefore decisions.
Within the investment world of real estate, decision-making criteria and the models used are much more developed and have considerable academic and practitioner focus. Within the corporate real estate world, the range of factors that influence decisions are much broader and more esoteric than those of the investment world with a focus on rates of return. That complexity of why a decision is made should provide fertile ground for investigation. However, the relative proportions of academics looking into this and the funding of such research appear to be considerably smaller. No doubt one of the factors is the bodies that are involved with corporate real estate (CRE) are structured in a different way and that end-users do not have the same interest as property companies in the broader research benefits, and also because CRE is a “side-show” to the main business. The challenge remains how to get CRE up the agenda.
In looking at workplace trends in office space, Professor Norm Miller considers the direction in which the requirement for office space is moving and the factors that are influencing the amount of space taken and why they are working towards its reduction. This illustrates how space requirements per worker are declining, but how, in part, collaboration space is influencing that. Tracking attitudes is important because there appears to be a tendency to let economic growth counter the downward shift.
That does lead to the question as to how potential changes in lease accounting will influence decision-making. Assistant Professor Rianne Appel-Meulenbroek and her co-writers consider the impact of the changes to the IFRS Lease Accounting Regulations on CRE strategies. They look at Dutch companies traded on the Amsterdam Stock Exchange (AEX) and consider the potential impact of the changes on lease length. This suggests that significant sums will come on to the balance sheet of companies should the projected changes come into force. The longer term consideration is whether the lease accounting requirements will become a significant driver in the amount of space that businesses provide per worker. Will there be a downward pressure on space taken as a consequence of the changes to minimise the effect on the balance sheet?
Our third paper from Hans Voordijk and his colleagues at the University of Twente considers strategic planning of CRE by looking at the real options and the impact they might have for the owner-occupier. Real options have been considered extensively in the financial investment market, and hence within the property investment market. The question is whether for the occupier they can provide a framework around which the interests and values of various stakeholders can be taken into account.
The final paper by Peter de Jong and Monique Arkesteijn at Delft University of Technology considers Dutch Schools and life cycle costs. By looking at a wider assessment of costs and focusing on the life cycle, they ask whether sustainability will become more pertinent if this approach is taken. By providing a holistic assessment will better buildings be delivered which will focus on sustainability and improve operating costs?
Howard Cooke