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Saturday, 29 February

Soaring Away with Outsourcing

Companies outsourcing their property and FM requirements have hit record levels across EMEA according to new data from CBRE.

CBRE's EMEA Global Workplace Solutions business received a record number of  Requests for Information or Requests for Proposals from corporations and other organisations in the region wishing to outsource all or part of their property activities in 2015, a 190% increase over 2012 activity.

Its analysis shows that the industrial sector was the most active in the EMEA real estate outsourcing arena, accounting for 23% of RFIs and RFPs received in 2015.  

The increase in industrial sector outsourcing is largely due to the following reasons:

  • Growing need for efficiencies due to concerns about slower growth in the manufacturing sector.
  • Single sites or smaller sites which, historically, are less conducive to outsourcing are now adopting this practice.
  • Specialist asset types require specialist advice so the sector, traditionally, has been more inclined to review portfolios ‘in-house’. Again, this practice is changing as third party service providers gain increasing technical expertise.

Strong demand for outsourcing services was also recorded in the technology sector which accounted for 14% of activity with financial services and healthcare each representing an additional 10%. 

CBRE’s data also shows the most popular property function to outsource is FM with 64% of its global outsourcing briefs including this service.

The growth trend for outsourcing is also reflected in CBRE’s recently launched European Occupier Survey which spanned 120 ‘world-renowned’ organisations. It found that 54% of respondents noted that that they outsourced some or part of their property requirements, via a specialist property advisory company. This figure marks an increase from 30% the year before and demonstrates that more corporates are seeking and using, specialist property advisers for outsourcing advice. 

“The first outsourcing contract was recorded in 1989 in the Americas,” stated Ian Entwisle, CEO EMEA Global Workplace Solution, CBRE. ”Since then, the market has moved to EMEA and grown exponentially in recent years.”

Mr Entwistle noted that initially contracts were task-orientated and focused on cost savings but over time that has changed. “The skills consultants can offer integrating the four main strands of real estate outsourcing, namely the management of facilities, transactions, projects and strategy consultancy, has become core parts of the attraction of the service,” he explained. “As a result, companies realise they can create a competitive advantage by maximising their estates through leveraging scale and utilising advances in technology to create better work environments.”

Picture: The breakdown of where outsourcing occurs on a global scale according to a CBRE

Article written by Mike Gannon

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