The Real Estate Hangover in Nigeria

Real estate is a critical asset for every organization, representing not only the physical space where work is produced, but also a representation of culture and the location where customers interact firsthand with the brand. As a result, Mr Omatsuli Tuoyo said , the quality of corporate real estate impacts productivity, brand perception and employee morale. Yet, it is surprising to note that most organizations are encumbered with too much real estate, often of the wrong quality to support modern work styles and brand perception. The average firm has 30 to 50 percent more real estate than it needs and this excess creates a substantial drag on financial performance.

Doesn’t sound like your organization? It may not feel like your firm is carrying too much real estate, but the industry aggregate numbers suggest it is a good bet that your real estate portfolio has excess fat to trim. The situation is still more dire than that: beyond the capital tied up in assets and lease commitments are the ongoing operating costs to support these bloated real estate portfolios. For every $100 million in real estate expenditures, ongoing operating costs account for $40 million annually. The oversized corporate real estate footprint, combined with poor management of existing assets, is a significant area of waste and a drag on corporate performance. To summarize: Too much real estate: Companies have too much space—as much as 30 to 50 percent excess. Usage is outdated: With changes in how work is performed (mobility, hoteling, etc.), existing space is utilized inefficiently.