Real estate and organisational performance

What is it about?

Real estate is increasingly used as a “fifth” resource to improve the performance of organisations by a positive image, cost reduction, increased employee satisfaction and increased labour productivity. A clear conceptual framework and standardised key performance indicators (KPIs) are needed to understand and monitor the effects of real estate interventions. This paper aims to explore the added value of real estate interventions to organisational performance, theoretically and empirically, including unforeseen positive and negative side-effects. The conceptual framework was based on an extensive literature survey and has been empirically used in a survey among 47 Institues of Higher Professional Education in The Netherlands and additional in-depth interviews at nine institutes. The effects of real estate interventions were studied by conducting time series analyses of changing organisational performance using several KPIs. The research has shown that real estate interventions actually improve organisational performance. However, the effects are not always as positive as expected, nor are they always clearly visible when using the present KPIs for organisational performance. And in addition, some effects are temporary.

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Why is it important?

The conceptual framework integrates know-how from various studies and fields and was empirically used in educational settings. The framework and suggested KPIs can be used to support managers in effectively steering on organisational performance by means of real estate interventions, formulating targets in a SMART way, setting priorities with regard to their organisation’s main objectives, and monitoring the effects.