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In today’s highly charged economic environment, all organisations have to make the most of all of the resources and assets at their disposal. Within corporate real estate this increasingly means adopting a portfolio approach to the management function. This paper assesses the adoption of performance management processes at this level through the review of practising leading corporate real estate teams. In documenting the measures deployed and how they are used, it identifies shortcomings and proposes an improved approach. The practical application of this is illustrated using a hypothetical case example, together with a list of potential measures.

The paper identifies the need for a portfolio approach to the management of real estate assets, and sets out its key components as a ‘macro’ level process. Portfolio management is positioned within an overall model of the corporate real estate function, from which a definition is developed. The main generic components of real estate portfolio management are described, and the most significant findings from a survey of current practices among a group of corporate organisations are presented. The paper concludes that in overall terms a more robust approach to the portfolio management of real estate assets is required to maximise the portfolio’s functional and financial value to the business.

Asks how occupiers can determine whether or not they are receiving value for money from their buildings. Encourages the premises audit as a means of assessing how efficient the premises really are, and how well they are supporting the main “core” business objectives of the organization that occupies them.

Presents an approach to premises management that provides a way of creating proactive flexibility in a naturally rigid entity. Considers the needs of modern business, the business response to flexibility, the significance of premises, current practice, proactive premises management, the premises policy, and the proactive tool. Concludes that an agreed premises policy provides the vehicle for proactive property management which can accommodate change rather than reacting ad hoc.

Reviews the techniques of performance measurement and benchmarking in the context of the performance of facilities‐oriented costs. States that performance measures should relate to: quality, delivery, cycle time, and waste. Concludes that it is important to place benchmarking and performance measurement of facilities within the overall strategy and aims of the organization to get a true picture of the overall performance equation.

Discusses various aspects of asset management that seek to maintain the value of assets and performance. Examines the premises policy, planned maintenance, computer‐aided facilities management, total control, and proactive asset management. Concludes that, while increasingly sophisticated planned maintenance procedures are needed, the best form of asset management is one which keeps an eye on both the overall picture and, as much as possible, the future.

Examines some of the issue involved in premises‐related disasters, and seeks to identify what can be done before the event to minimize the after‐effects. Considers three aspects of the facilities department′s responsibility: risk assessment, impact assessment and the preparation of a disaster recovery action plan – allowing a proactive response to any disaster. Concludes that a proactive approach is essential to avoid the wasting of valuable time after a disaster, while good disaster management can provide spin‐off benefits.

Examines the issue of how facilities departments should approach the potential benefits of computer‐aided facilities management, and how they can decide whether the implementation of a CAFM system will be of value. Considers a wide variety of the facilities that CAFM can offer: CAD, space utilization, asset management, IT/data services, lease/property management, cost/benefit analysis and financial control systems, as well as the benefits CAFM can confer. Concludes that the major benefit of IT investment is the creative power it can deliver.

The last few years of tight economic conditions have served to focus on the need for all organizations to be as “lean and mean” as possible. In this context, the need for the facilities function to contribute to the overall effort in full is clear. Indeed, many have argued that such a large “non‐core” expenditure should produce rather more than average in terms of efficiency improvements and resource and cost reductions. Treating the facilities function in this way is not without its dangers, however. The property dimension of the facilities budget is often the most inflexible component of the organization; and the reason organizations have facilities is to “facilitate” those “core” activities through which they create value ‐ and the reason they therefore exist. Any cut in facilities resource, service and/or cost, therefore, should only be undertaken with a wary eye on the consequent impact on the organization’s overall performance. One overall issue is of paramount importance ‐ all need to have a clear understanding of how their facilities are performing, how that relates to what the organization actually needs, and how the efficiency with which that performance is achieved can be improved on a continuous basis. Seeks to address these fundamental issues, in particular, reviewing in this context the technique of benchmarking, covering its scope, application, area of use and common problems.

Premises management should seek to realize their value organizationally, providing flexibility and potential for optimal use. Looks at different qualities involved and discusses these specifically. Concludes that, if the groundwork and disciplines are right, then premises management along the lines laid down has real business value.