Business Trends

Corporations Looking to RE Purely for Cost Cutting Face Risks, by JLL

File Type: Free Content, Article
Release Date: May 2013
Average Rating:       (0 Ratings)
Finance image

Companies that view real estate assets singularly as a source of short-term cost reduction are actually incurring hidden long-term financial and operational risks, according to Jones Lang LaSalle’s (JLL) second biennial report on Global Corporate Real Estate Trends. The report unearths the top corporate real estate risks, including possible negative impacts to competitive advantage and profitability from cost cutting, procurement processes, lack of collaboration between functions and failure to drive productivity. The 2013 survey measured insights from more than 630 corporate real estate executives in 39 countries.

"The global financial crisis moved real estate up in importance for CEOs as a tangible lever for enhancing revenue growth. Our survey shows that more CEOs today are realizing that investing in long-term, revenue-focused corporate real estate strategies can best leverage their real estate assets to mitigate risks and increase long-term profitability," said John Forrest, global director and CEO of JLL's Corporate Solutions business in Asia Pacific. "While short-term cost cutting is tempting, sustainable financial and operational benefits are more often achieved when cost reduction and revenue-enhancing investments are considered together."