Transcript
Page 1: Federal Property Management

Federal Property Management  

Professor Andrew Baum

September 19th 2014

Page 2: Federal Property Management

Introduction

How should government property assets be managed?

Who owns the asset?

Who manages and operates the asset?

ModelsOwner occupiedLeasedPartnership operated

Page 3: Federal Property Management

Ownership

Capital availability

Commitment to future liabilitiesRefurbishment costs

Page 4: Federal Property Management

Management

Office design and layout

Building maintenance

Facilities management

Page 5: Federal Property Management

Model 1: owner-occupation

Ownership provides control

Fit for purpose facilities and management?

Flexibility?

Page 6: Federal Property Management

Model 2: leasehold

Sale and leaseback can maximise capital receipts

Shared control: who manages facilities?

Page 7: Federal Property Management

Building 1

• Private tenants• Short leases• Value: £900m psf

Page 8: Federal Property Management

Building 2

• Government tenant• 20 year lease• Value: £1,500 psf

Page 9: Federal Property Management

Example: building 2

Government tenant, 20 year lease

Rent £500,000, fixed

Government bond yield: 7%

Value?

Page 10: Federal Property Management

Example: building 2

Government tenant, 20 year lease

Rent £500,000, indexed to inflation

Government indexed bond yield: 3%

Value?

Page 11: Federal Property Management

Model 3: partnership

Operating partner owns asset

Provides combination of space and facilities

Flexible for occupier

Expensive?

Page 12: Federal Property Management

Summary

How should government property assets be managed?Who owns the asset?Who manages and operates the asset?

ModelsOwner occupiedLeasedPartnership operated

What would a private business do? Is government different?


Top Related