global portfolio management & planning ......global portfolio management and planning survey...

Global Portfolio Management and Planning Survey

86.7%

66.7%

use cost per square foot as the key measurement for determining portfolio performance.

say Asia-Pacific will see the most growth for their companies over the next three to five years.

Financial Services

GLOBAL PORTFOLIO MANAGEMENT & PLANNING SURVEY SUMMARY

The financial services industry has experienced dramatic changes over the last three years. After the uncertainty of the Great Recession, financial services companies are emerging stronger and more stable, poised to embrace the possibilities of a radically different world.

Considering that a growing portion of the global business community is tying real estate portfolios to organizational goals, in 2010 we conducted a survey of leading financial services real estate and workplace executives to understand the opportunities and challenges associated with managing global real estate portfolios in a post-recession era. The survey explored trends and issues that portfolio managers identified as important.

This summary highlights survey results. Various Gensler offices will share the complete findings with clients and host discussions on how global portfolio management has changed and will continue to change. The survey will be revisited on an annual basis to see how the financial industry continues to evolve its practices to recognize new opportunities.

1

2

Highlights

Global Portfolio Management and Planning Survey 1

METHODOLOGY

Gensler issued this survey to financial services clients. The respondents represented an estimated 500 million square feet of global real estate. Fifty-seven percent of respondents were at director level or above, including senior vice president, vice president, and managing director. Nearly 33 percent reported directly to chief executives.

RESPONDENT PROFILE

Global Scope Respondents were responsible for understanding and directing global portfolio holdings with very diverse local workplace and real estate conditions.

Corporate Real Estate-Focused Role Office environments, including public-facing, back of house, and trading functions, constituted 79.1% of portfolios. No other property type exceeded 5.1% of respondents’ total portfolios.

What percentage of your company’s entire portfolio does each property type represent?

Over which geographies do you have direct responsibility?

Which of the following statements best describes the scope and responsibilities of your role?

Real Estate and Workplace Responsibility The majority of respondents reported responsibility for both real estate and workplace decisions, illustrating the growing alignment of these traditionally siloed organizational elements.

North America 64.3%United Kingdom 32.1%Western Europe 28.6%Other 25%Eastern Europe 14.3%Central/South America 14.3%Asia-Pacific 14.3%Africa 7.1%Middle East 7.1%Australasia 7.1%

Offices 64.3% Offices–Trading 14.8%R&D 5.1%Other 5.1%Data Centers 4.5%Retail 4.2%Call Centers 3.5%

Both Real Estate andWorkplace Decisions 64.3%Real Estate Decisions 28.6%Workplace Decisions 7.1%

(%)

0

100

50

75

25


FURTHER THINKINGAs Financial services companies expand into new regions, they will need to balance the desire for a consistent workplace brand experience while still providing a locally appropriate design and strong sense of place.

A Strong Eye Toward ExpansionDespite the volatile economic situation of the last few years, only 5.6% of respondents indicated their company expected no growth in the near future. Respondents expressed strong expectations of portfolio expansion over the next three to five years, with the strongest growth potential in the Asia-Pacific and European regions. Respondents expected smaller growth in the Middle East, Central America, South America, and Africa.

38.9% of respondents expected portfolio consolidation to occur in North America, while another 38.9% expected no consolidation in any region. The United Kingdom came in third with 16.7% of respondents expecting consolidation there.

Where do you expect the most portfolio activities for your company over the next three to five years?

!

66.7%5.6%38.9%

5.6%5.6%

16.7%0%

16.7%16.7%

33.3%38.9%

11.1%5.6%

22.2%5.6%

11.1%0%

5.6%38.9%

GrowthConsolidation

Asia-Pacific

Eastern Europe

Middle East

United Kingdom

Western Europe

Africa

North America

Central and South America

No activities expected

Australasia

0%


What measures do you use to determine the performance of your real estate/workplace portfolio? (%)

86.7%

73.3%

73.3%

66.7%

46.7%

13.3%

13.3%

13.3%

6.7%

Cost per square foot

Square feet per employee

Percentage of vacant space

Annual occupancy costs

Annual lease rate compared to market rates

Payback in years of workplace capital investment

Annual capital expenditure

Employee satisfaction

Employee productivity

Least

Most

A Reliance On Traditional Performance MetricsWhile a greater share of the global business community is incorporating human-focused performance metrics to align real estate strategy to organizational goals, the financial services industry still relies primarily on traditional cost-focused performance metrics. Respondents cited cost per square foot as the primary performance metric, with square feet per employee and percentage of vacant space following closely. Respondents cited human factors as relatively insignificant in determining portfolio performance.

Respondents cited the ability to obtain reliable portfolio data as their biggest challenge. Considering the heavy reliance on cost metrics to measure performance, the inability to obtain reliable data is a significant hurdle to developing comprehensive workplace/portfolio strategies.

FURTHER THINKINGWhat additional performance metrics can financial services companies use to measure portfolio effectiveness?

!

Most Moderate


Least Moderate Most

6.1

4.7

4.5

3.9

3.9

3.8

3.6

3.6

What are the greatest challenges you face when managing the workplace portfolio for your company? (Scale 1 to 10)

Ability to obtain reliable data

Clarity of decision making authority

Complexity of portfolio organizational structure

Finances/capital

Portfolio leadership model

Real estate/workplace team resources

Local market understanding

Real estate/workplace team expertise

Most


SustainabilityWhen asked if green initiatives are considered an important means of producing financial returns and operational efficiencies, the average response was 6.5 on a scale from 1 to 10. An overwhelming majority of respondents indicated they had certification policies in place or plans to do so in the near future.

FURTHER THINKINGHow can the financial services industry embrace sustainability as more than just an energy efficiency or recycling initiative?

!

93.3%

86.7%

60%

53.3%

46.7%

40%

38.3%

26.7%

Energy efficiency

Recycling

Reduced carbon footprint

Use of sustainable products/materials

Waste management

Space reduction via mobility programs

Commute reduction

Water use reduction

Most

Which green initiatives are most important to the global/domestic operation of your business? (%)

Least Most Moderate


Most

© Gensler 2011. The information contained within this brochure is and shall remain the property of Gensler. This document may not be reproduced without prior consent from Gensler.

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global portfolio management & planning ......global portfolio management and planning survey...

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