Real Estate Management and Value Adding in Corporate Institutions in Ghana

Abstract

Real estate is a delicate item for most corporations as it account for about 35% of the total asset on their balance sheet. This notwithstanding, very little attention is paid to it by most corporations. Top management view real estate and facilities services as a cost centre, despite the immense ways it adds value to corporations. Corporate real estate management contributions are often submerged in that of the entire corporations’ and it is often very difficult to quantify its total added value.  This paper adopts the value adding model by Lindholm et al. (2006) to ascertain its value adding strategies in the Ghanaian context. The paper also identifies new value adding strategies of corporate real estate in view of the dynamic business world.  Using convenience sampling, two corporations were selected for the study. The value adding model fits the study corporations, but for a few peculiarities. From the study cost reduction and increasing value of asset were the key strategies. Site selection, workplace design and the provision of the needed facilities are the major factors that influence marketing and sales, employee satisfaction and productivity. Increasing innovations was the least value adding strategy. Space rationalization and the use of a sound data base as value adding   strategies were peculiar findings not indicated by the model. The neglect of the real estate department in strategic corporate planning is a drawback to its value adding strategies. The study suggests that real estate must not be treated as a residual function. Real estate value adding strategies must also be linked to corporate strategy.

Keywords - Corporate Real Estate Management, Value Adding, Strategy, Ghana.