Property purchases can include plots of land associated with the title, which are beyond the obvious curtilage, sometimes even located a few hundred yards from the main plot of land. A history of portfolio acquisitions, changes in corporate ownership, rapid growth, mergers and management changes all add to the difficulties in keeping a reliable trail of what is in your portfolio. And it’s more common than you might think. This means there can be some unexpected pieces land that your company owns and has responsibility for.
Once you know what you have in your estate, how much is it all worth? There can be quite a range of answers to this question, depending on what perspective you approach the question from, for instance, is it the figure it’s in the books at, the value of the future cash flows, funding options, development potential, sales as a going concern or alternative use.
If you don’t have a clear picture of what you own, it’s impossible to plan your strategy. Perhaps it’s possible to gather all the information but would take so long that it has changed by the time you’ve finished the exercise. Likewise, if you don’t have knowledge of valuations it’s very hard to make informed decisions about any specific site. This leads to large amounts of potential value being left untouched and opportunities are missed to extract value from the estate. The worst-case scenario is something awful happens on property you own and you have liability for the disaster without even knowing it was part of your portfolio.
A lot more can be unlocked if you know the opportunities amongst your estate. Here’s some of the things that can happen when you don’t:
- Fail to act because you know there’s an untapped opportunity you haven’t put in motion. The long-awaited refurbishment doesn’t go ahead, or a poorly performing branch stays open that could be redeveloped because you know one day you want to sell it as a going concern and you’re worried about losing value.
- You invest in a property to optimise trading, but this holds you back from a highly beneficial divestment because the writeoff associated with that has become untenable
- The overarching strategy relating to core and noncore activities is impossible to crystalise because you don’t know the scale of the opportunity in either scenario
- You sit on ‘golden bricks’, which hold significantly more value with an alternative use and so could be used to fund multiple investments elsewhere through recycling capital
- Returns stagnate because the best use of the property does not much your current utilisation of your property
- Without this you miss opportunities and a desire to take some sort of action leads you to the least valueadd route. Or worse-still you end up in ‘analysis paralysis’ when you can’t decide what to and nothing happens at all!
Solution & Benefit
Using iSite, you can assemble a clear and complete picture of your property portfolio. This includes valuations, ongoing and planned initiatives and programmes, plus the strategy for each property.
It becomes natural to get into the discipline of populating strategy and plans on an ongoing basis so all the right people can access the information they need to inform decisions and spot opportunities. All plans across projects and valuations are joined up.
For instance, if you receive a speculative purchase enquiry, this information should be stored somewhere, and that’s better accessed in a single place and associated with the property in question. It’s similar for funding options, asset intensification and divestment options, all of which can be reported through dashboards created to put investment decisions in the context of all opportunities.
As a result you have a continually evolving and fully-informed strategy that includes any amount of:
- Product improvement, refurbishments, refits, model changes
- No misguided investments that cripple opportunities to unlock value
- Direct product investment where it adds most value to customer, matches customer needs, produces direct commercial gain
- Sell the right sites as going concern
- Sell the right sites for change of use
- Redevelop the right sites yourself where it’s the best option
- Can inform invest vs divest strategies with full log of purchase enquiries
- Identify your plans quickly so you don’t waste lots of time getting to the place where you know what you’re going to do with each site
- Asset intensification through surplus space. Alternative use within your demise but working in harmony with your operation and not disrupting. E.g. telecoms masts, nurseries, surgeries, drive thru’s, digital signage, vehicle charging points
- Enhance returns through divestment and reinvestment into growth and product improvement
- Enables all forms of continual insight gathering, such as completing questionnaires, physical property visits, results from surveys etc. so the body of information becomes richer and richer over time