Agent or Consultant?
Standpoint: Are the property and construction markets focused on providing occupiers with the best long-term value? Andrew Pegg, managing director for Midas business property consultancy argues that the property industry is failing its clients. We don’t believe that the best interests of occupiers are generally served by the property industry. The property market is driven by the landlord’s need for rising values, certainty and risk avoidance whereas occupiers often need cost stability, flexibility in response to rapid business change, efficient property available at the right time and any non business risk managed by those best placed to deal with it. This situation is compounded by the traditional remuneration structure employed by many property consultants and agents geared to the transaction value which is not to the benefit of the occupier client. For example, with remuneration based on the quantum of property value – ie the amount of space taken and its unit cost, agents quantify the value of their property advice in simple financial terms and look at volume and value over total cost and efficiency. This dynamic exacerbates the problem of inefficient use of space by the business world in the UK, which the RICS estimated to be £18bn pa in 2002. This is understandable as the agent’s remit is often simply to satisfy the occupier’s perceived requirements, rather than work with the client to identify the underlying or long-term needs for the organisation. However, business needs are becoming more complex and many forward-looking businesses are realising that the property can make an increased contribution to its overall performance if it is managed effectively and that the transaction is only one part of the overall accommodation solution. They are realising the importance of achieving the right solution- one that unlocks the value of the business potential, improves productivity, minimises risk and contains cost to an affordable level. To achieve this requires an independent impartial and objective, strategic approach that takes into account the competing needs of the business and integrates property with the future organisational strategy and objectives.
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