Is the much discussed agility of corporate real estate visible in practice? An empirical study of the relationship between business metrics and surplus property

    Howard Cooke Affiliation
    ; Rianne Appel-Meulenbroek Affiliation
    ; Theo Arentze Affiliation


Very little work has been undertaken on the consequences of economic recession on Corporate Real Estate (CRE) and its realignment following strategy changes. Only those CRE portfolios with short term leases have a dynamic alignment capability allowing them to readily adjust to change. For those with longer leases this leads to the creation of a surplus property provision (SPP). This paper analyses the relationship between SPP and metrics for business and CRE through a period of significant change, by examining company annual reports using a distributed time lag auto-regression model. The results show an inverse relationship between SPP and profits but a positive relationship with both turnover and employment, suggesting that declining profits trigger the re-shaping of CRE. SPP is used to provide portfolio flexibility because of the lack of dynamic alignment capability. SPP increases as the commitment to short leases (<5 years) increases. The estimated time for SPP to revert to zero ranges from 3 to 9 years, but one category, financial services, is continuing to increase its liability. CRE agility has yet to be visible in the financial reports of companies, suggesting its impact remains limited, indicating the relationship between business parameters and CRE is more complicated than envisaged.

Keyword : corporate real estate, CRE dynamic alignment, surplus property provisions, agility, restructuring

How to Cite
Cooke, H., Appel-Meulenbroek, R., & Arentze, T. (2019). Is the much discussed agility of corporate real estate visible in practice? An empirical study of the relationship between business metrics and surplus property. International Journal of Strategic Property Management, 23(4), 227-243.
Published in Issue
Mar 14, 2019
Abstract Views
PDF Downloads
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.


Apgar, M. (2009, November). What every leader should know about real estate. Harvard Business Review, 100-107.

Avis, M., & Dent, P. (2004). The strategic management of surplus property in the NHS. Property Management, 22(4), 303-317.

Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

Bingham, C. B., Eisenhardt, K. M., & Furr, N. R. (2011). Which strategy when? MIT Sloan Management Review (Fall), 1-12.

Cooke, H. (2004). FRS12: guidance on implementation for corporate real estate managers. Journal of Corporate Real Estate, 6(4), 309-324.

Cooke, H., & Appel-Meulenbroek, R. (2015). Impact of corporate real estate on UK business. In Proceedings of the 22nd ERES Conference, 24–27 June 2015. Istanbul, Turkey.

Cooke, H., & Foster, A. L. (2016, August). Breaking up is hard to do. Estates Gazette, 27.

Cooke, H., & Woodhead, S. (2008). Break strategy – the key to breaking out. Journal of Corporate Real Estate, 10(2), 110-120.

CoStar. (2012). Oxford agrees Cisco Green Park surrender. Retrieved from

de Vries, J. C., de Jonge, H., & van der Voordt, T. J. M. (2008). Impact of real estate interventions on organisational performance. Journal of Corporate Real Estate, 10(3), 208-223.

de Winter, J. C. F. (2013). Using the Students’ t-test with extremely small sample sizes. Practical Assessment, Research & Evaluation, 18(10), 1-12.

Gale, J., & Case, F. (1989). A study of corporate real estate resource management. Journal of Real Estate Research, 4(3), 23-34

Gibler, K. M., & Lindholm, A.-L. (2012). A test of corporate real estate strategies and operating decisions in support of core business strategies. Journal of Property Research, 29(10), 25-48.

Gibson, V. A., & Lizieri, C. M. (1999). New business practices and the corporate property portfolio: how responsive is the UK property market? Journal of Property Research, 16(3), 201-218.

Greenhalgh, P. (2008). An examination of business occupiers relocation decision making: distinguishing small & large firm behaviour. Journal of Property Research, 25(2), 107-126.

Guardian. (2016). UK productivity gap widens to worst level since records began 18 February 2016. Retrieved from

Haynes, B., & Nunnington, N. (2010). Corporate real estate asset management: strategy and implementation. Oxford: EG Books.

Heywood, C. (2011). Approaches to aligning corporate real estate and organisational strategy. In Proceedings of the 18th ERES

Conference, 15–18 June 2011. Eindhoven, The Netherlands.Heywood, C., & Arkesteijn, M. (2017). Alignment and theory in corporate real estate alignment models. International Journal of Strategic Property Management, 21(2), 144-158.

Heywood, C., & Arkesteijn, M. (2018). Analysing fourteen graphical representations of corporate real estate alignment models. Journal of Corporate Real Estate, 20(1), 16-40.

IAS37. (2001). International Accounting Standard 37: Provisions, contingent liabilities and contingent assets. London: International Accounting Standards Board.

Jensen, P. A., van der Voordt, T., & Coenen, C. (Eds.) (2012). The added value of facilities management: concepts, findings and perspectives. Lyngby, Denmark: Centre for Facilities Management & Polyteknisk Forlag.

Joroff, M., & Becker, F. (2017, March). Exploiting change and uncertainty to drive corporate value. The Leader, 32-35.

Kämpf-Dern, A., & Pfnür, A. (2014). Best practice, best model, best fit. Journal of Corporate Real Estate, 16(2), 97-125.

Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard. Boston: Harvard Business School Press.

Kay, J. (2010). Obliquity. London: Profile Books.

Kim, W. C., & Maugborgne, R. (2015). Blue ocean strategy (expanded ed.). Boston: Harvard Business School.

Krumm, P. J. M. M., & de Vries, J. (2003). Value creation through the management of corporate real estate. Journal of Property Investment & Finance, 21(1), 61-72.

Lindholm, A.-L., Gibler, K. M., & Levainen, K. I. (2006). Modeling the value-adding attributes of real estate to the wealth maximization of the firm. Journal of Real Estate Research, 28(4), 445-475.

Lizieri, C. M. (2003). Occupier requirements in commercial real estate markets. Urban Studies, 40(5-6), 1151-1169.

MacIntosh, R., & MacLean, D. (2015). Strategic management – strategists at work. London: Palgrave.

Maiona, M. (2013). The revised lease accounting proposals: Aesop’s fables revisited. Corporate Real Estate Journal, 3(1), 53-74.

McGrath, R. G. (2013). The end of competitive advantage. Boston: Harvard Business Review Press.

Mintzberg, H., Ahlstrand, B., & Lampel, J. (2009). Strategy Safari (2nd ed.). Harlow: FT Prentice Hall.

Neely, A., & Bourne, M. (2000). Why measurement initiatives fail. Measuring Business Excellence, 4(4), 3-7.

Nourse, H. O., & Roulac, S. E. (1993). Linking real estate decisions to corporate strategy. Journal of Real Estate Research, 8(4), 475-494.

Nunnington, N., & Haynes, B. P. (2011). Examining the building selection decision-making process within corporate relocations. Journal of Corporate Real Estate, 13(2), 109-121.

O’Mara, M. A. (1999). Strategy and place: managing corporate real estate and facilities for competitive advantage. New York: The Free Press.

Porter, M. E. (1985). Competitive advantage. New York: Free Press (extended edition in 1998 of the 1985 original).

Reeves, M., Levin, S., & Ueda, D. (2016, January−February). The biology of corporate survival. Harvard Business Review, 47-55.

Riratanaphong, C., & Van der Voordt, T. (2015). Measuring the added value of workplace change: performance measurement in theory and practice. Facilities, 33(11/12), 773-792.

Roulac, S. E. (2001). Corporate property strategy is integral to corporate business strategy. Journal of Real Estate Research, 22(1/2), 129-151.

Van der Voordt, T., Jensen, P. A., Hoendervanger, J. G., & Bergsma, F. (2016). Value adding management (VAM) of buildings and facility services in four steps. Corporate Real Estate Journal, 6(1), 42-56.

Worthington, A. C., & West, T. (2001). Economic value added: a review of the theoretical and empirical literature. Asian Review of Accounting, 19(9), 67-86.