Weatherhead, M. (1997).Real estate in corporate strategy. London: Macmillan.
Marion Weatherhead is a Sloan Fellow of London Business School and a former head of the Department of Building economics at South Bank University. This book one was published in 1997, and it was one of the Macmillan Building and Surveying Series books. The goal of this book was to help business managers and property experts to better understand the role of real estate in corporate strategy. It introduced case studies such as the IBM branch in the UK, British Telecommunications plc (BT plc)’s Workstyle 2000 building, etc.and discussed the strategies different company used to achieve space savings and cutting in property expenses.
The attitude towards real estate investment and management was significantly impacted by the economic environment. According to the author, during the 1980s, there was a very strong demand of new corporate offices in London. The culture of the decade was conspicuous consumption, in which every company wanted a bigger and better accommodation. Success was seen to breed success, so it was displayed by fountains, piazzas, and palm trees all within the corporate headquarters. When it came to the early 1990s, the conspicuous consumption was out of fashion. Under conditions of low inflation, owning property was less attractive for many business owners. Money was invested in the main core of business which provided higher returns. Cost-cutting in property expenses and occupancy costs became a popular strategy for corporations a way to increase profitability. Some office properties which were designed for a prosperous corporation image were considered as inefficient in the usage of space and resulted in excessive operating costs.
As the book was written in the 1990s, the development of personal computers and wireless communications made it timely for the large corporations such as IBM and BT plcto think about the way employee works and a new kind of workplace to accommodate the fluctuating employee numbers. According to the author, 5% of savings in real estate costs will result in up to a 1% saving in total cost and increase gross profitability by 9%. As for many of the UK’s large business, real estate expenditure represents 16-17% of total costs, the need to reduce real estate costs particularly for those mature, less profitable companies was reasonable and desirable. Based on this argument, new ways of working such as “hoteling” office, “hot-desk” sharing office strategy was considered as a solution benefited from advanced communication technology. Technology optimism was fully expressed through the texts.
Although the author keeps mentioning that the main role for real estate property is to service the users, the main topic of this book is limited in cost control for corporate real estate management. It is reasonable to argue for cost-saving strategies as a solution for businesses under economic pressures, however, the goal of achieving a better service for the property occupants cannot be achieved through this approach. It is noticeable that there is a change in recent corporate real estate studies. More focuses are placed on answering the question about how workplace environment could add values for business through increasing employee’s creativity, adaptability, loyalty, satisfaction, health, and safety, etc. The changing way of work and the changing workplace environment should be understood in multiple layers. New workplace design concepts should also respond to different stakeholders' interests. The role of real state in a business should be discussed for each operation with an understanding of the stakeholders and the specific context and circumstance.