SSUD71 Corporate Property and Asset Management Report Sample

SSUD71 Corporate Property and Asset Management

Identify and discuss the nature and diverse impacts of major global trends on the management and use of corporate and institutional property assets. You may wish to consider the following aspects:

• Adopt a PESTEL framework

• Focus on the Australian market but using international comparators

• I suggest a report format but this is not obligatory if you are happier with another approach

• Please use a minimum of 11 points – preferably 12 – for the content and do ensure any imported material is fully legible. Be professional in every aspect of your work

• I really like Times New Roman as the font, but it is your choice

• Referencing is not your choice: use the Harvard protocol, not APA

• The appropriate length is somewhere around 3,000 words as this is worth 30% max of the semester mark

• As postgraduate students, you may have strong views about how better to approach the topic. So, if this is the case, please mail me to discuss.

Solution

Introduction

Corporate and institutional property refers to the property owned by an entity rather than an individual owner. These types of properties are generally owned by corporate offices, banks, businesses and others. Since these properties are owned by entities rather than individuals, they have different sets of laws, regulations and guidelines than individually owned properties (Hazan et al. 2021). This is because these property assets are often misused by the entities breaking laws and often for monetary benefits. Additionally, corporate owned properties have different set of liabilities, taxation, zoning and regulatory compliance that need to be governed by different sets of laws.

Considering corporate and institutional properties, the owning entities can be of several types – Corporations (small to large business enterprises), Institutional Investors (insurance companies, wealth funds and others that invest in property), Government Agencies (office buildings, transport infrastructure and others) and Non-Profit Organisations (hospitals, universities, charities and others) (Ghauri, Strange and Cooke 2021). These types of properties can also be of several different types including Commercial (retail spaces, office buildings, warehouses, hotels and others), Residential (hostels, housing societies, student and senior living facilities and others) and Special Purpose (healthcare, education, transport and others). The investment strategies that these entities adopt also differ widely – some entities prefer direct ownership while others utilise portfolio management and investment trusts. Either way, these entities own huge volumes of property assets that also often rented out to other entities or individuals. Going by the global trends, management and use of corporate and institutional property assets has become a separate domain governed by government laws and guidelines (Flew 2021).

In this report, the nature and diverse impacts of major global trends on the management and use of corporate and institutional property assets have been discussed and analysed with specific focus on Australia and its standpoint compared to elsewhere globally.

Corporate and Institutional Property Assets – Discussion and Analysis

Corporate and institutional property assets for management assignment expert are the properties that are owned by the corporate sectors and institutions. Corporate property assets are owned by businesses for the purpose of their operations like offices, warehouses, retail spaces, manufacturing and others (Gujral et al. 2021). On the other hand, institutional property assets are real estate owned by entities like insurance companies, real estate investment trusts, pension funds, and others. Both the types of properties and assets are influenced by global trends in terms of management and utilization.

Corporate Property Assets

Corporate property assets are impacted by global trends significantly and this is not just limited to one region only. The main aspects of global trends that affect corporate property assets are as follows:

Technological Advances – Globally, technology is evolving at an astonishing pace. In the last 20 years, the global technological evolution has been mind blowing to say the least, and as expected, the technological advances have significantly impacted the corporate property assets and usage as well. The evolution of technology has enabled corporate organisations to allow the employees work remotely and as a result, the needs for extensive office space for the employees have been reduced significantly, especially in the last 3 years due to the COVID19 pandemic (Siniak et al. 2020). The integration of IoT and other workplace optimization techniques have also allowed the corporate organisations to work with lesser office space. As mentioned, the onset of the pandemic and subsequent lockdowns around the world have also forced the corporate organisations to shift to remote working setup and thus, the need for office space has also reduced accordingly. With more advancing technology including communications, it is likely that the remote working system will become even more prevalent around the world and thus, the needs for corporate properties will also decrease unless there is a major spurt in the birth of new corporate organisations choosing to open new office spaces.

Sustainability Initiatives – As the pollution and negative impact of human civilization are impacting the global environment more and more, there are calls for sustainability initiatives around the world. With increasing public awareness, sustainability initiatives are also becoming more and more common and as such, corporate organisations are also looking to implement sustainability practices, even in the management of corporate properties and assets (HALkOS and NOMIkOS 2021). Most of the corporate organisations around the world, especially the multinational giants are resorting to green building practices and are making significant investments in technologies that are energy efficient and office spaces that are environment friendly. In order to align with the sustainability goals and practices, the organisations are also having to manage the corporate properties and assets accordingly.

Economic Fluctuations – Economic fluctuations have profound impacts on the corporate sector be it operations or assets and property management. Economic downturns result in a reduction in property valuation and an increase in the overall costs forcing the organisations to reduce investments and expenses or even property spaces by selling or leasing (Liu 2023). On the other hand, when the economy is on the upwards graph, the organisations can increase investments in properties that can grow in value over time.

Regulatory Changes – As already discussed early in the report, corporate properties and assets are subject to several government regulations and guidelines that are much more complex than individual properties (Singer et al. 2022). However, these regulations also change significantly from time to time including changes in ownership laws, zoning permits, dispute management, and others. Due to these changes, corporate organizations also need to adjust and change their strategies regarding property management, acquisitions, and investments.

Institutional Property Assets

Like corporate property assets, institutional property assets are also affected by different global trends from time to time and they are applicable all over the world rather than a specific region. Some of these global trend factors are discussed as follows.

Demographic Shifts – The demands for institutional property assets are driven by major changes in demographic shifts (Colgan, Green and Hale 2021). Positive growth of population like urbanization, population spurt, aging population, and others increase the need for institutional organizations like rented apartments, old age homes, hostels, healthcare centers, universities, and others. Hence, with the increasing population and a positive demographic shift, the demands for institutional properties also increase, thus also increasing the costs of such properties. Hence, investors of this sector need to adjust their investment strategies based on the demands and the ongoing demographic shift.

Technological Disruption – Technological innovations that disrupt the market also have significant impact on the institutional property management practices. Technical solutions have become available for tenant engagement, asset monitoring, portfolio management and other operations that have provided faster and more efficient outputs than manually handled operations (Sharam 2023). As a result, assets and property management are much easier for the organisations as they can change their strategies and approach for the same. These institutions utilise technology and use data analytics, artificial intelligence and blockchain technology to enhance investment decision-making and operational efficiency.

Globalization – Globalization is a major driving force behind the business organisations going abroad and accessing new markets but also, it allows the institutional investors to invest in properties and assets in other countries (Shenkar, Luo. and Chi 2021). While these investments and globalization as a whole enhance capital flows, integrates separate markets and cross-border collaboration, they also lead to increased competition from the institutions especially between local and international and also increased complexity in management of properties and assets across multiple countries.

Environmental Considerations – Environmental considerations often come into play when risk and sustainability factors come into consideration during institutional property investment strategies and risk management planning (Jabareen 2013). Various regions around the world are prone to natural disasters, which can create significant negative impact on the properties and assets. For long term benefits and sustainable management of assets, organisations need to consider possible environmental risks and develop appropriate planning to bypass those risks and ensure long term survival of the assets.

PESTEL Analysis

In this above section of the report, detailed discussion has been conducted on the factors that impact corporate and institutional property and asset management procedures. The overall discussion mainly tried to provide a global perspective that is applicable to almost everywhere on the world. However, depending on region, there are still some major and minor differences among those factors and thus, they have different degrees of impact on corporate and institutional property and asset management.

Australia is a diverse country that has developed significantly over the last few decades. With increasing population, urbanization, technology development and other factors, property and asset management processes and strategies have also changed significantly to be more in line with the changing landscape of the country. A PESTEL analysis has been conducted below in order to identify the factors affecting the property and asset management procedures in Australia and also how they are different from other countries in the world like India.

Political – In Australia, political factors have always played a role in corporate and institutional property and asset management. The Australian government has issued various policies and guidelines including National Rental Affordability Scheme, urban renewal projects and others whereas they also have implemented negative gearing restrictions and potential changes to foreign investment rules (Han, Kim and Jin 2021). The policies and guidelines change from time to time and organisations have to change their strategies accordingly. The Australian government also has stringent climate change policy that is enforced on all types of corporate and institutional properties and assets (Warren-Myers and Cradduck 2023). Compared to this, for example, the Indian government has much more relaxed policies and less focus on the climate change factor. The policies and guidelines are also significantly different from the ones in Australia.

Economic – There are four main economic factors in Australia that impact the corporate and institutional property and asset management sector. These four factors include resource price fluctuations, interest rate changes, global economic uncertainty and inflationary pressures. Australia relies on the global markets for resources like iron ore, coal and others that are exported from elsewhere. As a result, if there is a significant price changes in these resources in the global market, Australian economy becomes vulnerable and it impacts the property management sector significantly as well. Economic downturns lead to lesser investments in the property management sector (Wong, Wong and Mintah 2020). Meanwhile, in countries like India that produces these natural resources in the country and is less reliant on international market, global economic downturn has lesser impact on the property investment sector. The Reserve Bank of Australia controls the monetary policies, decisions and interest rates including borrowing costs, property valuations and other factors that impact on the property investment sector as well. Other than relying on global market for natural resources, Australia is also reliant on the global economy for trades, supply chain and diplomatic relations that have direct or indirect impact on the property investment sector. Global economic uncertainty leads to supply chain disruptions, recessions, uncertainty in trade and tensions with other countries influencing the Australian property investment market directly. Finally, the increasing costs of prices of materials and property due to inflation also impact property based projects’ feasibility and rental yields.

Social – Social factors have positive impact on the property investment sector in Australia. Significant increase in the aging population in the country has catered demand for more institutional properties like old age homes, healthcare centres, temporary housing and others. This is quite similar in other parts of the world too, where the overall population has increased significantly over the past few decades that have also led to increase in the ageing population. Highly populated countries in the world like India and China have already seen significant rise in demands for these properties (World Health Organization 2021). Australia, while not densely populated as a whole if the entire country is considered, the urban areas a densely populated and there are rising demands for institutional properties. Additionally, with the changes in corporate policies and the changing work landscape as an aftermath of the recent pandemic, the preferences of the people have also changed regarding work arrangements. There is now more focus on wellness and sustainable work arrangements, which are reflected on the workspace design and amenities in the corporate properties.

Technological – Technologic advancement in Australia has seen a major impact on the property investment sector. With the evolution of technology, Australia has implemented the use of PropTech solutions that include smart building technologies, data analytics platforms and co-working platforms (Siniak et al. 2020). This technology helps in automating processes, optimizing space utilization and enhancing tenant experiences that also drives demand for the properties towards an upward graph. Various emerging technologies like robotics, automation and artificial intelligence have disrupted the traditional property management models as well as job markets. However, this is not the same landscape as other countries around the world (Webster and Ivanov 2020). India, for example, is less advanced technologically and as a result, the technologies have made less impact on the property sector. On the other hand, China is far more technologically advanced and hence, the technologies have had profound impact on the property investment market. In line with the previous segment discussed, technology has also changed the working sector of the country following the extensive lockdowns during the pandemic and the corporate sectors have swiftly adapted to such changes to manage their assets and properties sustainably.

Environmental – Australia is a country that is severally affected by environmental issues. From extensive desert areas to annual forest fires, Australia has seen destruction of huge amount of amount of properties every single year due to these natural calamities and disasters and these have profound impact on the property investment markets. Land areas that are more prone to the natural disasters like forest fires have less value and also pose major threats for the potential buyers of such properties. The Australian government has also set Net-Zero Emissions Goals for both transport and the property sector owing to the increasing amount of pollution and an effort to curb the same (Wood, Reeve and Ha 2021). These goals and policies have forced the property sector to retrofit existing buildings and incorporating sustainability principles in new developments, which have also made impacts investment decisions and construction costs. Investment strategies in corporate and institutional properties are also affected by factors and policies like water use restrictions, green investment opportunities and rising sea levels. If landscapes from other countries are considered, it can be seen that the policies and the market are different in other countries. Countries like India still have lower emphasis on green building and environmental sustainability whereas European countries like Germany have strong emphasis on environmental sustainability and environment friendly property management.

Legal – Of all the factors mentioned in the PESTEL analysis, Legal is probably the biggest factor that affects the corporate and institutional property and asset management sector. This is mainly because; there are significant amounts of legal obligations and regulations usually associated with this sector. Australian “Building Codes and Regulations” are evolving continuously with the changing landscape of investment in properties and assets and they have major impact on impact construction, renovation, and accessibility standards for corporate and institutional properties (Wei et al. 2021).

Property managers (both corporate and institutional) collect and store data related to property values, ownerships and others using online databases and hence, there are increasingly more legal regulations as storing such confidential data in the online database makes them vulnerable to cybersecurity threats. There are also changes in the tenancy law from time to time, which impact lease agreements, dispute resolution procedures, and tenant rights, influencing property management practices. There are also various taxes, property rights, and foreign investment regulations that are updated from time to time and they affect the property investment sector. These legal regulations vary significantly when other countries are considered as they have different sets of rules, guidelines, and laws.

Overall, from the PESTEL analysis it is seen that Australia has a specific landscape of external factors that impact the corporate and institutional property and asset management sector, which also differ considerably from other countries. This points out to the fact that despite changes in global trends in the property and asset management sector, the impacts of those global trends are different depending on the country. There are several factors that contribute to these differences – demographics, economic situation, technological advancement, region based demand, climate, political situations and many others. These are all reflected in the PESTEL analysis where the landscape in Australia is analysed and compared to the landscapes in other countries.

Conclusion

Overall, from the analysis conducted in the report, it can be summarized that corporate property assets are owned by businesses for the purpose of their operations like offices, warehouses, retail spaces, manufacturing and others whereas institutional property assets are real estates owned by entities like insurance companies, real estate investment trusts, pension funds and others. Based on the study conducted on the evolution of technology globally, it has been found that in the last 20 years, the technological evolution has been mind boggling and has significantly impacted the corporate property assets and usage. The COVID19 pandemic has kick-started the culture of remote working and with more advancing technology including communications, it is likely that this new remote working system will become even more prevalent around the world. This will also force the corporate properties to decrease in number unless there is a major spurt in the birth of new corporate organisations choosing to open new office spaces. Another important factor involved is pollution – as the pollution and negative impact of human civilization are impacting the global environment more and more, there are calls for sustainability initiatives around the world. With increasing public awareness, sustainability initiatives are also becoming more and more common and as such, the corporate organisations are also looking to implement sustainability practices, even in the management of corporate properties and assets. When discussing about properties, it is of utmost importance to discuss the economic aspect as they have major impact on the property management sector. Economic downturns result in reduction in property valuation and increase in the overall costs forcing the organisations to reduce investments and expenses or even property spaces by selling or leasing. The demands for institutional property assets are driven by major changes in demographic shifts. Positive growth of population like urbanization, population spurt, aging population and others increase the need for institutional organisations like rented apartments, old age homes, hostels, healthcare centres, universities and others. Finally, it is deduced that globalization is a major driving force behind the business organisations going abroad and accessing new markets but also, it allows the institutional investors to invest in properties and assets in other countries.

References

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