Search results

Research in the late 1980s showed that in many corporate real estates users were not fully aware of the full extent of their property holdings. In many cases, not only was the value of the holdings unknown, but there was uncertainty over the actual extent of ownership within the portfolio. This resulted in a large number of corporate occupiers reviewing their property holdings during the 1990s, initially to create a definitive asset register, but also to benefit from more efficient use of space. Good management of corporately owned property assets is of equal importance to the management of other principal resources within the company. A comprehensive asset register can be seen as the first step towards a rational property audit. For the effective, efficient and economic delivery of services, it is vital that all property holdings are utilised to the best advantage. This requires that the property provider and the property user are both fully conversant with the value of the property holding and that an asset/internal rent/charge is made accordingly. The advantages of internal rent charging are twofold. First, it requires the occupying department to ‘contribute’ an amount to the business equivalent to the open market rental value of the space that it occupies. This prevents the treating of space as a free good and, as an individual profit centre, each department will then rationalise its holdings to minimise its costs. The second advantage is from a strategic viewpoint: by charging an asset rent, the holding department can identify the performance of its real estate holdings. This can then be compared to an internal or external benchmark to help determine whether the company has adopted the most efficient tenure pattern for its properties. rents by UK‐based corporate businesses and explains internal rents as a form of transfer pricing in the context of management and responsibility accounting. The research finds that the majority of charging organisations introduced internal rents primarily to help calculate true profits at the business unit level. However, less than 10 per cent of the charging organisations introduced internal rents primarily to capture the return on assets within the business. There was also a sizeable element of the market who had no plans to introduce internal rents. Here, it appears that, despite academic and professional views that internal rents are beneficial in improving the efficient use of property, opinion at the business and operational level has not universally accepted this proposition. This paper investigates the use of internal

The Swedish central government has implemented a radical market‐oriented reform of its real estate management. Authorities are free to rent premises from private firms, and stateowned properties have been allocated to a number of entities that lease their properties to authorities on conditions similar to those on the open market. The background and experience from these reforms are described in this paper. Local authorities and county councils have also reformed their real estate management systems in the same direction, but not as radically. There were many unexpected problems with implementing these systems, related for example to difficulties in writing good contracts for special purpose buildings, conflicts about rent setting and differences in bargaining power between the property‐owning units and the tenants/authorities. The general view is, however, that the reform created necessary economic incentives for the authorities in the public sector to economise on premises, but that it is very important to think through the details and to adjust the system to changing circumstances. An example is that the introduction of school vouchers created problems for some systems of setting internal asset rents.

Considers the management of the valuation exercise required of local authorities to enable them to include asset valuations in their balance sheets after 1994. Examines the problems and opportunities which may come with the development of an asset register and asset rents and, in particular, the valuation principles to be employed.

Notes an increasing interest in valuation of publicly owned real estate, and also controversy about the relevance of different concepts of value, especially for special purpose properties. Argues that it is important to distinguish between different contexts before taking a stand on this issue. Discusses three such contexts: external information, asset management and introduction of buyer‐provider models for real estate services within the public sector. Concludes that there is no type of public property for which the question of asset value is unimportant, and also that the information provided by aggregate values and a traditional balance‐sheet is small.

Research undertaken by the authors over the last two years has revealed a number of problems in valuing non‐market, non‐investment properties in the public sector. The first part of the article draws together some of the literature in the area of public sector asset valuation and management. This is intended, first, to highlight current thinking about the issues involved in the valuation exercise, second, to focus on some of the unresolved aspects and, finally, to suggest areas for further consideration to help resolve these.The second part of the article provides an introduction to, and critical examination of, the valuation methodology commonly used to value specialised property assets. Possible alternative approaches are suggested, which may better enable authorities to assess the performance of their assets and integrate these into the management processes.

This study aims to investigate practitioners’ perceptions of strategic work in municipal facilities management: how public facilities management is changing, what is included in strategic public facilities management and who leads the strategic work.

A literature review begins with mainstream studies of strategy management, ultimately concentrating on municipal facilities management. Findings are based on a 2020/2021 questionnaire targeting 356 practitioners in municipal facilities management across Sweden (50% response rate). The statistical treatment includes factor analysis.

Most respondents indicated changed ways of managing facilities in the past five years; most reported that they were in an organization with an explicit goal of working more strategically. Respondents associated strategic facilities management with governance, facilities, sustainability, technology change and communication. Frequently, it was the management team of the facilities management department that led strategic work.

Research into municipal facilities management is dominated by studies in Northern Europe, and more studies from other regions are needed. How strategies and work roles evolve in parallel appears to be a fruitful direction of further research.

Facilities managers need stronger competences and more resources to engage in strategic facilities management. Findings indicate a need to integrate sustainability aspects better into long-term strategic work.

More strategic municipal facilities management is of obvious social value.

This is the first study of practitioner perceptions of work on strategic facilities management in municipalities.

The purpose of this paper is to identify the advantages and disadvantages of introducing internal rent and to find the main success factors when introducing internal rent.

This paper’s analysis is based on experience from the introduction of internal rent models within four major Norwegian public organisations. The experience is documented after 19 semi-structured interviews with stakeholders representing the client organisations, property management and tenants.

The major advantage consist in that internal rent compels the different users to discipline concerning the use of space and make them adapt their use to fit the real needs and demand for space suited for their primary activities. The main disadvantage of internal rent consists in the temporary organisational noise that results from the introduction and the permanent extra bureaucratic burden it causes. The success factors for introduction of internal rent are: the users need to perceive the model as of real importance, the property management must take in enough funds to assure reliable maintenance and the client needs to avoid that the tenants think the model is constructed to seize funds.

The authors discuss a market-orientated approach to property management, namely, introducing internal rent models. It is more than a decade ago since internal rent was first introduced in the analysed public organisations. Now it is possible to identify the success factors – related to the advantages and disadvantages – from this introduction.

The purpose of this paper is to show that general‐ and special‐purpose properties have to be dealt with differently by the public sector.

Application of standard economic theory concerning pricing of properties and infrastructure. The issues are analyzed based on experiences from Swedish state‐owned properties.

The distinction results in quite different public property management strategies. Special‐purpose properties have no short‐run alternative use and have limited rental and capital values, unlike general‐purpose properties. Thus, to apply a required rate of return based on assumed capital values universally will lead to inefficient use. For special‐purpose properties, short‐run marginal costs (SRMCs) should be charged – no more.

General properties owned by the state represent a suitable case for privatization. For special‐purpose properties, only SRMCs should be charged.

The paper makes a distinction between two kinds of state‐owned properties; general‐ and special‐purpose properties, and analyzes the important consequences in property management.