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Introduction To Corporate Real Estate Management (Crem) - Bakare 2010
Introduction To Corporate Real Estate Management (Crem) - Bakare 2010
1.0 Introduction
The rare concept of Corporate Real Estate Management {CREM} appears to be relatively new to
African countries, although past literatures have shown that this concept has been applied with
records of success in developed countries business organizations.
It is apparent from the few known Nigerian studies on the concept {Oladokun, 2010.,
Njungbwen and Udo, 2010.}, that the practice of it in Nigerian corporations, is either in its
rudimentary stage, and/or not applied at all in some sectors of the nation.
This has been the main urge of the few researchers in this distinct real estate discipline in Nigeria
to make painstaking efforts to de-mystifying the concept of CREM, in its most pristine form, to
Nigerian students {e.g. In the university at Ife, and at Uyo}.
This article humbly addresses CREM in a way that will make it understandable to the laymen,
and particularly, to the practicing Estate Surveyors and Valuers, who are yet to understand it.
This little effort was also meant to elucidate the Applied Property Management {ESM 506} class
lecture on CREM at Obafemi Awolowo University, Ile-Ife, Nigeria in 2010 by Mr. T. T.
Oladokun, in preparation of final year examination.
I hereby hope that the reader of this article, after reading it, will understand the basic concept of
Corporate Real Estate Management {CREM}.
CREM STRATEGIES
According to Nourse and Roulac {1993}
Capturing the Real Estate Value creation of the Business
Occupancy Cost Minimisation
Flexibility
Facilitating Production, Operations, Service Delivery
Facilitating Managerial Process and Work Knowledge
Promoting Marketing Message
Promoting Sales and Selling Process
Promoting Human Resources Objectives
According to Oi {2010}
Cost Reduction; {which relates to, .Property Management}
Workplace Strategy; {which relates to, .Facility Management}
Portfolio Optimisation; {which relates to, .Asset Management}
transferred to a subsidiary of the business organization, e.g. like the Intercontinental Homes and
Briscoe Properties is to Intercontinental Bank and Briscoe Company respectively in Nigeria).
An alternative is to classify the CREAM structure into profit centers and cost centers (Veale,
1989). Moreover, profit centers appear to be aligned with wholly owned subsidiaries while cost
centers appear to be aligned with centralized and decentralized departments (Rutherford and
Stone, 1989).
- CREM Performance Measurement
CREM Performance Measurement simply refers to the assessment and determination of success
of CREM, i.e. Assessing and Determining the contribution of the companys real estate to the
entire organisation as a result of effective and proactive CREM.
An effective CRE performance measurement system helps identify areas of deficiencies and set
corrective actions into motion.
Importantly, CRE managers needs to identify the Critical Factors Influencing the CREAM
performance {Veale, 1989}:
competitive market position, the cyclicality of demand and the demand elasticity that will affect
business performance. Consequently, the requirements for business real estate are affected{Liow
and Nappi-Choulet, 2007}.
4.0 Conclusion
The relatively new nature of the contemporary strategic Corporate Real Estate Management
makes it a worthwhile area to be researched on. The crux of the international bandwagon
approach of advanced countries towards Corporate Real Estate Management is to tap from the
neglected real estate resource of corporations.
Proactive measures towards corporations real estate is a sure way to add value to the core
business of the organization, and a source of succor in the problems of economic fluctuations to
corporate organizations {Bakare. 2010}.
5.0 References
Ali, Z. {2008}: Corporate Real Estate: Another Real Estate Area. Integration & Dissemination, pp. 8-10.
Ali, Z., McGreal, S., Adair, A. and Webb, J. R. {2008}: Corporate Real Estate Strategy: A Conceptual
Overview. Journal of Real Estate Literature, 2008.
Bakare, I. {2010}: An Appraisal of Corporate Real Estate Management Practice in the Hospitality Industry in
Nigeria {A Case Study of Hotels in Lagos State}. Unpublished thesis Submitted to the Department of
Estate Management, Faculty of Environmental Design and Management, Obafemi Awolowo
University, Ile-Ife, Osun State. December, 2010.
Bon, R. {1994}: Ten Principles of Corporate Real Estate Management Performance. Facilities Vol. 12 No. 5,
1994, pp. 9-10.
Breitenstein, O., May, A. and Eschenbaum, F. {1998}: The Components of Corporate Real Estate
Management. LACER No. 3, 1998, pp. 473-478.
Fuerst, F. {2009}: Managing Real Estate Investments: Key Concepts and Definitions: A review of International
Concepts and Definition. Henley University of Reading. January, 2009
Gibson, V. A. and Barkham, R. {2001}: Corporate Real Estate Management in the Retail Sector: Investigation of
Current Strategy and Structure. Journal of Real Estate Research, Vol. 22 Nos. 1/2 2001
Lindholm, A-L. and Levinen K.I. {2006}: A Framework for Identifying and Measuring Value Added by
Corporate Real Estate. Journal of Corporate Real Estate, Volume 8, No 1, 2006, pp 38-46.
Lindholm. A-L. {2008}: Identifying and Measuring the Success of Corporate Real Estate Management
Performance. Dissertation for the degree of Doctor of Science in Technology, Helsinki University of
Technology, Faculty of Engineering and Architecture, Department of Surveying, {A42}, May, 2008.
Liow, K. H. and Nappi-Choulet, I. {2007}: Corporate Real Estate: Perspectives, Evidence and Issues.
Institute of Real Estate Studies {IRES} Working Paper Series.
Oladokun, T. T., Aluko B. T. and Odebode A. A. {2009}: Corporate Real Estate Management: A Need For
Paradigm Shift in Nigeria. The Estate Surveyor and Valuer, Journal of the Nigerian Institution of Estate
Surveyors and Valuers {NIESV}, pp. 67-73.
Oladokun, T. T. {2010}: Towards Value-Creating Corporate Real Estate Assets Management in Emerging
Economies. Journal of Property Investment and Finance, Vol 28, Issue 5, pp 354-364 , 2010.
Oluwoye, J., Karantonis, A. and Fakorede, A. {2001}: Corporate Real Estate Asset Management: A Conceptual
Framework. UTS Property Research Unit University of Technology, Sydney. Pacific Rim Property
Research Journal, Vol 7, No 1, 2001.
Njungbwen, E. and Udo, G. O. {2010}: Benefit Of Corporate Real Estate Management To Higher Education
Institutions. Department of Estate Management, University of Uyo, Nigeria.