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Defining a corporate real estate
management’s (CREM) brand
Abdul Jalil Omar
Department of Real Estate Management,
Faculty of Technology Management and Business,
Universiti Tun Hussein Onn Malaysia ( UTHM ), Johor, Malaysia, and
Christopher A. Heywood
Faculty of Architecture Building and Planning, University of Melbourne,
Melbourne, Australia
Abstract
Purpose – This paper aims to explore how branding theory can be used to understand corporate
real estate management’s (CREM’s) relationships with its customers. Specifically, the perspectives of
CREM executives and customers are used to develop a statement of a CREM brand.
Design/methodology/approach – A multiple case study approach from four industry sections that
consist of telecommunications, logistic, retail, and education from an emerging real estate market
(Malaysia) and a mature real estate market (Australia). CREM executives and CREM customers from
each case were interviewed to obtain information on CREM within organisations.
Findings – The findings indicate that CREM supports the business by managing organisations’
strategic real estate resources as its brand. CREM executives focus more on the technicality of
real estate functions, while CREM customers expect corporate real estate (CRE) to support their
business functions.
Research limitations/implications – A CREM brand is important to CREM relationship building
with the targeted customers. Successful brand development is able to increase CREM visibility to
customers and at the same time gain appreciation of its contributions to the organisations.
Originality/value – This is the first study that investigates CREM from a branding perspective. The
mechanism for communicating CREM contributions using branding helps to increase acceptance from
the customers.
Keywords Branding, Internal communications, Corporate real estate, Emerging property market,
Internal service
Paper type Research paper
Introduction
Corporate real estate management (CREM) is perceived as a new area within real estate
and business community. To some extent, it can be seen overlap the boundary of other
real estate areas. The term “corporate real estate (CRE)” popularly used in the early
1980s starting from Zeckhauser and Silverman (1983) defining CRE as the land and
building owned by companies not primarily in the real estate business. However, there
is a slightly different definition given by Dresdow and Tryce (1988) where they
included real estate leased and controlled by the corporation as the CRE. Brown et al.
(1993) added that the term of CRE applies to real estate assets either owned or leased
by firms to achieve corporate objectives. Several other studies also define CRE as
real estate held whether it is owned or leased by a corporation to achieve the
organisational goals ( Joroff et al., 1993; Roulac, 1999; Manning and Roulac, 2001;
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-001X.htm
Journal of Corporate Real Estate
Vol. 16 No. 1, 2014
pp. 60-76
qEmerald Group Publishing Limited
1463-001X
DOI 10.1108/JCRE-10-2013-0031
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Ali et al., 2008). This led to a common definition that CRE are real estate assets either
owned or leased by corporations in pursuit of its primary business mission. There is no
doubt that previous studies define CRE and its management as the workplace,
property management, and managing the facilities.
There is no problem with these definitions. However, heading into the new century,
CREM’s role has improved to be more than just providing workplaces for employees
and finding suitable locations for organizations to do business. Senior management
realises that CREM could contribute to many areas including human resources,
finances, internal culture development, improved productivity, marketing, and many
more. These multiple roles played by CREM creates confusion for customers about
what constitutes a CREM brand.
Having a brand for CREM brings CRE from being seen merely as the bricks and
mortar of physical assets into an important resource for organisations. Branding CREM
as a resource for organisations increases CREM’s status from an operational
management level to the strategic management level equal to what human resources and
finance are experiencing. CREM has the strategic capability because its contributions
are very significant to organisational success, especially in the form of merger and
acquisition, capital spending, relocation, global expansion, marketing decisions, staff
allocation, productivity improvement, team building, property management, handling
facilities, reducing operating cost, and many other contributions ranging from
operational level up to the strategic management level.
Branding application in CREM has been mentioned by several researchers, such as
Roulac (2007) and Appel-Meulenbroek et al. (2010). However, both studies referred to
physical branding of the CRE which is different from the service branding of CREM.
This study is an extension of a previous study by Omar and Heywood (2010) that
adopted branding as a tool to unpack CREM’s positioning status within organisations.
CREM has evolved from supporting business operations into an important resource in
fulfilling greater customers’ demands to achieve an organization’s goals. The focus has
already changed from daily routine property activities at the operational level into
various management levels across different functional departments in a variety of
settings. Effectiveness of CREM functions relies upon synergising real property value
with other organisational functions as part of the strategic resources for organisations.
As there is increasing interest from real estate researchers and practitioners in
CREM, this study aims to contribute to an understanding of CREM within
organisations. Specifically, this study aims to provide an explicit definition to CREM’s
brand drawn from the two of the perspectives of CREM executives and CREM’s
customers. This will allow the CREM community and customers to have a better
alignment of CREM’s role within organisations.
A CREM brand is created in the customers’ mind
The issue of the branding between services and physical goods still remains an open
issue. However, there is growing acceptance that service brand positioning is different
from product positioning (Cunningham et al., 1997; Blankson and Kalafatis, 1999). This
claim is supported by de Chernatony and Dall’Olmo Riley (1997) who state that a service
brand is more challenging and relies heavily on a service provider’s actions and
attitudes. It has been suggested that from the customer’s perspective that the behaviours
of service provider employees also influence customer perceptions of the service
Defining
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61
(Harris and Fleming, 2005). Thus, it can be seen that services are slightly different to
products due to the nature of services that are attached to the service provider.
The purpose of having an understanding of a brand is to provide a clear guidance for
implementing a communication program (Aaker, 1996). Positioning for the brand is part
of the identity that the brand must communicate to the audience. The same as for
products, services such as CREM, need the same approach where services are not
created in an organisation only, but brand positioning is created in the mind like a friend
you love or a neighbour whom you dislike (Mey ers and Lubliner, 1998). According to this
theory a person can assume a position or a position can be imposed on a person. In this
positioning activity, more than one party is involved – oneself and the other at the same
time. One side has always positioned the other while simultaneously positioning himself
or herself. Every time somebody positions him/herself on one side of the discursive act
this always involves a positioning to the other side that is being addressed. Perceptions
in the mind of a customer should be taken into account when talking about positioning
a service product. Essentially, each member of the organisation plays an important role
during their representation of service because gaps may exist between service
specifications and actual employee behaviours (Parasuraman et al., 1985).
In order to tackle this situation, it is suggested that CREM executives and CREM
customers play their roles in improving CREM contributions within organisations,
particularly in understanding the potential of CREM to deliver value for both parties.
This is important because a brand is initially created in the mind of the customers
rather than the service provider (Aaker, 1996; Ghodeswar, 2008). Service delivery act as
a promise for the CREM brand in order to achieve customer satisfaction. Therefore,
a study of the CREM customer’s perception of CREM itself is needed in order to create a
strong brand for CREM.
It is important for CREM to define its brand for communication purposes to its
targeted customers such as senior management, business units, and stakeholders.
A brand simplifies communication strategies by providing a clear value proposition
to the targeted customers (Ulrich and Brockbank, 2005). Furthermore, an effort to
increase CREM’s status involves more than presenting its technical performance but
also involves the relationship building strategies (Omar and Heywood, 2010). Ability
for CREM to communicate in accordance with organizations’ goals and direction will
increase acceptance from customers. At present, the age of broadcasting and
mass-marketing to mass audiences is giving way to an era of narrow marketing that
customised to smaller segments (Nandan, 2005). Therefore, having a CREM brand
ensures consistency and uniformity in communication to be noticed, to change
perceptions and to reinforce attitude that lead to deep customer relationships.
Understanding of internal service branding
Internal customers can be defined as individuals or other departments within an
organisation that internal service provider serves (Minjoon and Shaohan, 2010). In this
sense, an organisation can be conceptualised as a chain of individual units that are
linked together to satisfy external customers. Thus, the collaboration between work
units consisting of service provider and internal customer ultimately impacts on the
company’s ability to meet or exceed external customers’ needs and expectations. Some
researchers have argued that internal customers are equally important as external
customers in providing faster products or services to the market, lower waste and costs,
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and improve external customer service quality (Finn et al., 1996; Stanley and Wisner,
1999, 2001). Despite its strategic importance in sustaining competitiveness in the
marketplace, the issue of internal customer satisfaction with internal service has
received relatively little attention from researchers.
Branding an internal service requires more than just addressing the meaning of
“service” because the problem in defining a service is that it involves many degrees of
intangibility (de Chernatony and McDonald, 1998). A successful service brand derives
from carefully nurtured relationships, which develop staff and customers’ respect for
certain functional and emotional values of the brand (de Chernatony and
Dall’Olmo Riley, 1997). A successful brand conforms to the following criteria:
.a successful brand has a name, symbol or design which identifies the product or
service as having sustainable competitive advantage;
.a successful brand results in superior profit and market performance;
.a successful brand is only an asset if it leads to sustainable competitive
advantage; and
.a successful brand, like other assets, will depreciate without further investment.
These elements are identifiable as adding values in increasing profit and performance
that lead to sustainable competitive advantage will then turn an internal service into an
asset for the organisation. The specific nature of a service requires tailored concepts
and approaches consist of consistency, adding value, and accepted by the customers
(McDonald et al., 2001). To improve brand strength, a service provider needs to shape
this set of perceptions so that the targeted audience will think that the brand brings a
positive impact to them.
A challenge in delivering internal service is whether the internal service’s core
competency aligns with expectation from internal customers in providing quality
service to external customers because an internal service provider is under an unstated
“contract” with other departments to provide a specified level of service (Farner et al.,
2001; Cannon, 2002). Thus, it is crucial for the internal service provider to understand the
expectations set by its customers in order to be accepted by customers within
organizations.
Methodology
Based on the branding framework, this study adopted in-depth interviews and
document analysis from eight organisations. The organisations were selected from
four different industries consisting of retail, telecommunication, education and
logistics. These organisations were selected from two real estate markets: developing
(Malaysia) and developed (Australia). A reason to explore the two markets is to explore
branding application for CREM in different real estate markets. The company names
used here are pseudonymys because of ethics requirements approved by the
University’s human ethic committee for this study.
The in-depth interview used the positioning, communicating, delivering and
leveraging (PCDL) model developed by Ghodeswar (2008) as the framework for this
study. This model is part of branding theory for developing a strong brand. This paper
focuses only on the exploring CREM brand through its core competencies from the
perspective CREM executives and CREM customers (Table I).
Defining
CREM’s brand
63
Selection of respondents was restricted to high ranking management in order to obtain
an overall view of CREM positioning in the organisation. This meant that there were
a minimum of two interviews from each case representing each party: a CREM
executive and a CREM customer. The number of respondents was chosen for its
practicality relative to the research time-frame, and also to provide corroborative
evidence relating to CREM positioning.
For document analysis, the study explores published material from official sources
that represent the selected organizations, such as annual reports, official web sites, and
news published by the company to the public. This method works as a triangulation to
the information found from the in-depth interviews. Through empirical exploration,
this study intended to contribute a better understanding of the internal service
provider in improving its service to the customers.
CREM core competencies
Two perspectives were found to be useful to understand CREM positioning and in
explaining the relationship between the service providers’ side (CREM executives) and
the users’ side (CREM customers). The core competencies for CREM can be seen from
the following two perspectives:
(1) CREM executives’ perspectives; and
(2) CREM customers’ perspective.
An obvious core competence found from CREM was the role as custodian in
safeguarding organisations’ physical assets. To some extent, CREM can claim the
custodianship of their organisation’s physical assets as a super core competence because
due to its main contributions in safeguarding organisation’s physical assets. Therefore,
it is important to identify sub-competencies for CREM in order to explain CREM’s super
core competency because these core competencies provided a different meaning and
understanding from the CREM executive’s and the CREM customer’s perspective.
CREM executives’ perspectives
The organizations awarded the custodianship role to CREM functions based on CREM’s
knowledge and experience in handling all property matters. From the study, it was
evident that CREM as custodians was pervasive encompassing areas of responsibility in
property management, facilities management, and even strategic real estate
management (Table II). There was no clear boundary in defining the custodianship
Retail Telecommunications Education Logistic
Malaysia Case 1 (ChickBase) Case 2 (TMC) Case 3 (PMU) Case 4 (MalLogistics)
CREM
Executive
1
CREM
Customer
1
CREM
Executive
2
CREM
Customer
2
CREM
Executive
3
CREM
Customer
3
CREM
Executive
4
CREM
Customer
4
Australia Case 5 (Home
Bakers)
Case 6 (TLT) Case 7 (BMT
University)
Case 8 (LL Logistics)
CREM
Executive
5
CREM
Customer
5
CREM
Executive
6
CREM
Customer
6
CREM
Executive
7
CREM
Customer
7
CREM
Executive
8
CREM
Customer
8
Table I.
Case selection for
interviews
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Area Role Function
Facility management Workplace planning Space provider
Indoor air quality
Workplace environmental
management
Team working coordination
Building operations Security
Daily maintenance and cleaning
Physical upkeep
Energy consumption management
Property management Property administration Rental collection
Property reporting
Record keeping for property
Property marketing Marketing spaces for let
Tenant selection
Rental schedules
Physical and environmental
management
Renovation
Refurbishments
Maintenance and replacement of
facilities
Health and safety
Environmental and sustainability
management
Property transactions Property inspections
Property negotiations
Documentation
Purchase and dispose of property
Property legal Legal documentation assessment
Tenancy laws
Legal requirement for property
Procurement Central purchasing function
Strategic real estate
management
Property support for business
units
New outlets development
Property consultancy for business
units
Central property decision-
making
Property monitoring across business
units
Part of team in company mergers and
acquisition
Part of mergers and acquisition team
Cost control mechanism
Property master plan Long-term physical planning
Capital plan
Business relocation planning
Profit generation strategy Unlocking idle land bank
Joint venture with property trust
Property disposition
Space rental to outsiders
Sale-and-leaseback
Table II.
CREM’s core
competencies from CREM
executives’ perspective
Defining
CREM’s brand
65
role for CREM because to some extent this role seemed overlapping with other
competencies. However, explaining CREM’s custodianship role from the perspective of
facility management, property management, and strategic real estate management
provided some insight into this understanding.
Facility management
There were two main roles conducted by CREM within facility management area in the
studied organisations. They are:
(1) workplace planning; and
(2) building operations.
The main facility management roles for CREM can be seen as the provider for space as
the workplace to house workers and for running the organisation’s core business. This
workplace was more than just providing a basic office space for workers. CREM
executives were expected to come up with solutions to changing working styles, ranging
from supporting knowledge workers, increased team working and collaboration,
independent workers, flexibility, reducing the management gap among employees,
being able to improve productivity, promote creativity, and many more. Besides, the
space provided for workers, CREM is also responsible in providing spaces for running
core business operations. Fore example, CREM executives in LL Logistics played an
important role in making sure their warehouses and distribution centres were properly
managed.
Within the facility management area, CREM executives were responsible for
handling building operations such as security, daily maintenance, cleaning, and
looking after the physical upkeep of an organization’s space or physical assets. This
covers all the physical assets owned by organizations to run their core operations. For
example, besides office spaces CREM executives from TLT are also responsible of
maintaining all the telephone exchanges, mobile phone towers, retail outlets, data
centres and other telecommunication facilities. One of the elements that had a
significant contribution in highlighting CREM’s image was energy consumption
management. This can be in the form of cost savings, promoting green technology, and
utilisation of organisation’s energy resources. This element can be part of CREM
strategies in adding value for organisations.
Property management
CREM executive’s involvement within the area of property management in the
studied organisations involved several main roles. Among them were property
administration, property marketing, physical and environmental management,
property transactions, property legal matters, and procurement.
Property administration is directly related to rental collection, keeping records for
physical inventories, and property reporting. This is for making sure that all an
organizations’ physical assets are well managed. It was a common practice in the
studied organizations to have a property database to track their inventory of spaces,
lease expiration dates, locations, and the physical condition of the organisations’
assets. The property administration task can be more crucial and complicated when it
involves many properties at different locations, such as those faced by the studied
retail organisations – ChickBase and Home Bakers.
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The role as property marketing provides CREM executives with the opportunity to
venture into their own real estate business. This role also came with the ability to select
tenants and determine the rental schedules for rental spaces. Even though this role
seemed small compared to property maintenance’s, this role allowed CREM to
demonstrate to their customers and senior management CREM’s ability to generate
additional income for organisations.
There were slight differences in the role as physical and environmental management
in property management compared to the area of facility management. The scope of
work involved with larger scale projects such as renovation for new outlets,
refurbishment, and replacement of outdated facilities outside the workplace.
Environmental management within property management represented the health,
safety, managing environmental, sustainability of physical, and spaces. This role
created an impact for organisations in terms of providing space at an affordable price.
Balancing between reasonable costs with environmental sustainability was about
looking at the long-term impact from the physical assets, especially related to
environmental management and health and cost in operating the building.
As an expert in real estate matters, CREM executives played an important role in
handling property transactions within organisations. Among the property transaction
activities that required CREM executives were property inspections, property negotiations,
documentation, and acquisition and disposal of property. Property inspection was among
the earliest process for every property transaction process. Property inspection activities
provide assessment of the property’s suitability for conducting the organisation’s core
business in terms of size and working conditions for the employees. Property negotiation
was a stage in bargaining a price with an owner or landlord. At this stage, the
understanding of hidden costs involved with property transactions was an important
consideration in getting benefits from a property transaction. Property negotiation cannot
be measured tangibly, it is a skill gained from experiences in handling property matters
such as through estate agency, property development, property management, property
maintenance, or property mergers. On top of property knowledge, knowledge about
finance, feasibility studies, and development processes showed CREM executives as the
right people to undertake property negotiations for a company.
In this study, the involvement of CREM executives in the legal aspect was crucial for
organisations, especially when there were many property transactions, or mergers and
acquisition. These activities need people with technical property knowledge, like CREM,
because these activities are involved with transferring property rights and legal binding
agreements that can have a big impact on organisations. The typical practice in the studied
organisations was that every property transaction that involved legally binding documents
had to go through the CREM functions for assessment. Legal documentation assessment
was a crucial part in property transaction processes. It was time consuming and business
units did not have time and knowledge to understand the legal documents and the impact
on the organization in the future. Activities in legal assessment for leases were involved
with outgoings agreement, land tax, terms of payments, responsibilities of each party, and
other charges involved. Making sure a property transaction was right in the first place was
a key to safeguarding organisations’ interest and preventing legal complications.
CREM procurement’s role was in the form of handling centralized support services
that is related directly to property matters. For example, CREM functions in BMT
University and TLT were responsible for buying stationery, fleet management,
Defining
CREM’s brand
67
and health and safety materials. The CREM function became involved with this role
mainly because CREM was part of finance department within the organisational
structure (three out of eight cases). This role provided CREM with an opportunity to
expand its capability beyond management of only the physical assets.
Strategic real estate management
Apart from the facility and property management aspects mentioned above, CREM
functions were also involved in strategic real estate management in organisations. At this
area, for the studied organisations, the focus was more towards aligning physical assets
and spaces with organisational core business. At a strategic real estate management level,
normally CREM contributions were embedded into organizations’ strategy, and it was
difficult to identify that the strategy belonged specifically to CREM. A strategy may be
initiated or driven by CREM executives but the whole strategy itselfinvolved other parties
such as the finance functions, the human resources department, and also the business
units. This role involved with long-term and on-going commitment and contributed
impact to organisations on a larger scale. Among of the roles within this area were:
.property support to business units;
.central property decision-making;
.develop property master plans; and
.generating profit from property.
As a support function, CREM’s main objective is always to support business units’
activities such as opening new outlets, and providing property consultancy for business
units. There were organisations such as ChickBase, Home Bakers, and MalLogitics that
have specific tasks for their CREM function such as opening a number of outlets for
business units. However, other organisations still allowed CREM to be a diverse role
ranging from providing advice, lease management, feasibility study, site selection and
many other physical related activities being handled by CREM. The main intention was
to make CREM as a property point of reference for business units.
CREM contributed to strategic real estate management by playing a role as central
property decision-makers, especially involving legally binding transactions. The central
property decision-making allowed an organisation to monitor real estate activities
across business units in the organisation. The ability to monitor these property activities
by business units provided an opportunity for organisation to use property as a cost
control mechanism. For example, space charging helped organizations to save costs and
pushed business units to rethink their space usage. In addition, CREM executives were
part of the team in merger and acquisition activities to provide input from a property
perspective in this strategic aspect of real estate management.
Another strategic role of CREM at the strategic management level was CREM’s
involvement in developing property master plans for organisations. The development
of a master plan was highly used by organizations that directly depended on physical
assets and space to run their core business, such as PMU and BMT University. In this
situation, a database of physical assets played an important part in providing input to
organizations in making justifications for a proposed project. Having a complete
database also allowed for space audits inside organisations and allowed for space
monitoring across business units.
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Last, CREM’s strategic management role was to generate profit for an organisation.
This study found that the CREM function could contribute profit for organisations
from unlocking an idle land bank for development, a joint venture with a property trust
company in managing an organisation’s property portfolio, property disposition, space
rental to outsiders, and sale-and-leaseback. However, CREM had trouble in
highlighting the profit generated from these activities because there was no
separation in financial reporting between profit generated by CREM and other
business units. Therefore, CREM has strategic contributions, but the challenge was to
demonstrate this ability as an individual entity.
CREM customers’ perspectives
This section presents the CREM core competencies from the perspective of their
customers. An overview on how customers perceive CREM provided an understanding
of core competencies between CREM executives’ and CREM customers’ perspectives.
There were similarities and differences between these two in building the relationship
within organizations.
CREM customers still perceived CREM function as the custodian of an
organization’s physical assets. However, the core competencies for CREM functions
from their customers’ perspective have slightly different outcomes from what the
CREM executives perceived themselves. Arrangement of the competencies showed
that customers stressed the importance of supporting and providing property solutions
to business units running their core operations. The core competencies from CREM
customers’ perspective can be divided into three main categories (Table III).
Business unit focus
Strong evidence of a business focus was found in CREM core competencies from
CREM customers’ perspective. Customers, in this study, expected CREM to play its
role without separating CREM into property specialisations such as facility
management, property management, property investment or any other
specialisations, which is what the CREM executives did. CREM customers’ role for
CREM in supporting business units were:
.supporting business units’ core operations;
.property searches for business units; and
.provide property input for the strategic plan.
Core competencies Roles
Business unit focus Supporting business units’ core operations
Property search for business units
Provide property input for strategic plan
Property service provider Property maintenance
Workplace management
Property legal administration
Act as property owner for organisations Space allocation
Reduction of property footprint
Space charging
Table III.
CREM’s core
competencies from CREM
customers’ perspective
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CREM’s brand
69
Supporting business units’ core operations was about CREM functions supporting
business units to achieve their goals. The main objective for business units in their core
operations was to satisfy their own consumers who received their services or products.
This consumer is the main source of income for business units. Apart from the
importance of satisfying the consumer, business units saw their success as a joint
success with CREM functions because both parties came from the same organization.
Interestingly, conducting property searches for business units was an activity in
which customers highly depend on their CREM functions. CREM executives have the
ability to search for property that suits the needs of business units, especially in creating
competitive advantage. In this process, CREM functions acted like a property agent for
business units in fulfilling their customers’ requests for new property. The customers’
knowledge of CREM’s property knowledge and understanding of business boosted
customers’ trust that CREM would find suitable property for the business. However,
a request for a property search strictly came from business units and never originated
within CREM functions as business units are the ones that will use the property and fund
its acquisition.
Strategic planning with the input from CREM function allowed both CREM and the
business units to share the same goal. Having CREM functions in the strategic planning
process helped to define what are the detailed operational activities needed for a specific
goal. Customers in this study found that it was important to include CREM executives in
their strategic planning because a physical project normally involved large costs and
was a long-term investment. A project needs to be right from the beginning, as once the
project begins it has to work.
Property service provider
Customers perceived CREM as a provider of property services to them. This
competency played a big part in understanding customers’ perception because CREM
is an area that involves technical knowledge. Among the services customers noted that
they received in this study were:
.property maintenance;
.workplace management; and
.property legal administration.
Property maintenance played a big part in services provided to customers. Activities in
property maintenance were varied, depending on the nature of the business’ property
and nature of the businesses, for example looking after cooling and heating systems,
cleaning, and fixing broken doors. It was encouraging to find that property maintenance
costs also became a part of customers’ justification in requesting a building or new
spaces to support their core businesses. This made the CREM function part of an
important element in making decisions in supporting business units. However, failure in
delivering proper property maintenance as expected by customers had a negative
impact on relationship building with customers. For example, a customer in the TMC
case (an external tenant in this case) was unsatisfied with the property services provided
by the CREM function. Customers expected fast responses from the CREM function in
relation to property maintenance to prevent disruptions to their core business.
Another service provided by CREM functions to business units was in terms of
workplace management or working environments. This covered several activities
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ranging from energy consumption management, indoor air quality, lighting, and
health and safety management that were part of the services that customers were
looking for from CREM functions in providing supportive workplace environment.
The workplace management included doing building fit-out according to business
conditions and requirements.
Property legal administration in the business units’ projects was handled by CREM
executives as this matter is considered as part of CREM technical expertise. It was
found that organisations prevented business units from having any legal binding
agreement for property transactions without the documents being assessed by CREM
function. This was because property legal matters have a big impact on organisations,
and the organisation is exposed to many risks if not properly managed.
Act as property owner for customers
Customers in the study also trusted CREM to act as their property owner. Having the
responsibility as an owner provided CREM with several roles. There were:
.space allocation;
.reducting the property footprint; and
.space charging.
In this study, customers were aware that space allocation was based on the business size
and number of occupants. This means that if a business unit houses more staff then
probably they were entitled to demand more space from CREM. For example, in the
case of PMU, the customer requested more space given to their business unit as they house
more staff and students compared to others. But to some extent, this ratio between size and
space is also based on the nature of activities. Business activities that involved a large
amount of warehousing, such as LL Logistics, required more space in terms of storage
compare to TLT and TMC that required office space to house their knowledge workers.
Because CREM relates much to management of assets and direct control of costs of
an organization, it has financial control elements, especially through the property
footprint. This can be shown from reduction in property footprint as a strategy to
reduce costs by business units. In reality, property footprint reduction was often a
result of a space charging process that was implemented for business units. When they
had the responsibility to pay for the space they used, then when they found ways to
minimise the cost and at the same time increase their profit. Apart from savings for
space costs, for one organisation, a reduction in footprint through consolidation of
existing sites provided a justification for a new office environment. This new office
brought excitement to many staff and at the same time, the CREM function could make
an impression in managing the organization’s physical matters.
The idea of space charging was part of organization’s strategy to control costs
because of misuse of space provided to business units. Charging for spaces allocated to
business units helped to increase the awareness and efficiency in managing their
spaces. In this study, though not widely used, it was the business units that welcomed
space charging even though they have to pay for the space they used. At some stage,
this activity forced a business unit to act and think like a business entity in terms of
profit and loss in managing their spaces. With a space charging approach, business
units have an incentive to use their own initiative to optimise, consolidate, or surrender
back the space to CREM functions to dispose or hand over to other business units.
Defining
CREM’s brand
71
This study found that customers are the people who determine the CREM boundaries,
not the CREM unit. This finding counteracts most marketing theory that suggests a
brand is determined by the product or service provider not the customers. Here, CREM
positioning is shaped by the instructions received from its customers before CREM is
able to initiate an action or strategy. This requirement positioned CREM as reactive and
not a strategy driver. Therefore, it is important for CREM to address customers’ needs
because the survival of CREM within an organisation is in the customer’s hands. This
requires CREM to be ready to have flexible boundaries to move beyond just physical real
estate services in making sure an organisation’s core business operates smoothly. It is
worth noting that the CREM effort in fulfilling these boundaries may vary depending on
the organisation’s core business, especially related to real estate matters (Table IV).
Table IV shows that CREM main role is principally positioned as the custodian of
physical assets for organisations. Different roles for CREM depended on the focus of
organisations, their core activities, and the frequency of property activities they
require. There is no big different in roles played by CREM in Malaysia and CREM in
Australia even though these organisations come from different property background.
However, organisations that have a large number of outlets, such as ChickBase and
Home Bakers, tended to structure CREM as their outlets’ controller. Meanwhile,
organisations that employed large numbers of knowledge workers, such as TMC,
PMU, TLT and BMT University preferred CREM to be responsible for the workplace
or office management in terms of property maintenance, facilities maintenance,
renovations, and workplace management.
Malaysia Australia
CREM roles ChickBase PMU TMC MalLogistics
Home
Bakers
BMT
University TLT
LL
Logistics Frequency
1. Physical and
environmental
management
††† † † ††† 8
2. Building
operations
††† † † ††† 8
3. Property
administration
††† † † ††† 8
4. Property master
plan
††† † † ††† 8
5. Property
transaction
†††† ††6
6. Workplace
planning
†† † † † † 6
7. Property supports
for business units
†† † † † † 6
8. Central property
decision-making
†††† ††6
9. Procurement †††† ††6
10. Property legal †††† ††6
11. Profit generation
strategy
†††† † 5
12. Property
marketing
†† † † 4
Frequency 9 7 12 11 9 7 12 10
Table IV.
Roles for CREM
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A pattern also emerges from the studied cases indicating that CREM in organisations
with headquarters and responsibility for managing outlets for organisations such as
retails and telecommunications, are significantly involved in strategic decision making
and operational activities. CREM in these organisations required additional knowledge
and skills due to the different nature of property and activities. However, the findings
indicated that CREM strategies are highly dependent on an organisation’s physical
assets held relative to CREM core competencies.
Defining a brand for CREM
Information from the literature and empirical evidence from the study indicated that a
CREM brand consists of three elements (Figure 1). They are:
(1) CREM as a resource for organisations;
(2) CREM supports organisations’ core business; and
(3) CREM supports through real estate functions.
This study defines a CREM brand as:
CREM supports the business by managing strategic real estate resources.
First, CREM as a resource for organisations means that CREM is one factor or input of
production to produce goods or services. There are already many debates from the
perspective of classical economics to modern economics’ perspective about what is
meant by factors of productions. Factors of production can range from land, labour,
capital, entrepreneurship, technology, intellectual capital, human capital, natural
resources, and many more, depending on the economist’s’ school of thought and
perspective. All of these resources are assembled by an organization in order to
produce outputs in the form of tangibles and intangibles. A common feature found in
blending these inputs to produce outputs as it has physical dimensions – space,
Figure 1.
Elements in the
CREM brand
Defining
CREM’s brand
73
and location. CREM plays an important role in being a custodian of organizations’
physical assets. As an important resource, CREM has the potential to be a permanent
agenda item at the strategic management level.
Second, CREM supported organisations in a variety of ways especially organisati on’s
core business. For physical activities, CREM was found to be involved in a wider range
of activities within organisations ranging from property transactions, interior fittings,
renovations, refurbishment, space rental, land development, mergers and acquisitions,
team building for employees, energy saving, marketing, distributions, property master
plans, lease management, fleet management, security management, procurement, and
many more. Apart of making sure physical activities are properly managed, CREM is
also responsible for supporting other business activities that move beyond physical
aspects. These roles include promoting human resources functions, increasing
productivity, providing financial flexibility, promoting the marketing message, and
many more. Organisations may outsource the supporting activities whether physical or
non-physical to external service providers but they still require internal coordination
and alignment to suit an organization’s objectives. The coordination between internal
and external services is CREM’s support to organisations.
Third, CREM’s existence can be seen mostly through its real estate functions.
However, given the definition of real estate as being a bundle of rights, one can
understand that real estate is beyond just the “bricks and mortar” elements. Real estate
involves physical and non-physical management. Physical real estate involves the
building, facilities, interior fittings, furniture, storage, building materials, and many
more. Meanwhile, non-physical elements involve managing spaces, property
transactions, legal, ownership, lease management, goodwill, location, team building,
culture development and many more. Therefore, CREM responsibility does not limit
physical activities only but also incorporates the physicals with non-physical activities.
Being a support function means CREM faces the risk of replacement if it is not able to
perform as expected by customers or organisations. Customers could find an external
service provider as a replacement in order for them to operate their core business.
An understanding of CREM’s core competency and capability helps customers utilise
CREM in supporting their core operation. In this situation, communications plays an
important role in conveying CREM messages and increasing understanding for
customers on how CREM supports the business by managing the strategic real estate
resource. Strategically, CREM could brand itself as the business’ strategic real estate
resource manager.
This study shows that CREM needs to better frame itself in terms of supporting
business as that is what their customers saw as CREM’s core competence. This is
because the study showed that CREM saw its competencies as being in terms of
real estate management tasks – facility management, property management and
strategic real estate management. If there is confusion in customers’ minds, as has been
noted, then clearing that confusion and building on the brand provided here would be
best if done in terms of the way that CREM customers saw CREM – having a business
unit focus, being a property service provider and acting as an owner. This suggests
that CREM needs to reframe what it sees as its core competencies. This would impact
on the way it communicated what it does and how it formed relationships with its
customers.
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Conclusion
The difference between what CREM executives perceived about themselves with the
customers’ perspective indicates that CREM customers have limited understanding of
the details of CREM functions. Most probably, they lack interest in the details because
the main concern for them was how CREM supports and helps their core operations.
As the CREM brand is developed in the customers’ mind, then it is the CREM
responsibility to communicate its core competencies to the customers.
As a strategic real estate resource, CREM supports organisational core businesses
as an input of production for the organisations. CREM contributions move beyond
physical contributions into intangible roles, including human resources and financial
contributions. Myopia from senior management, which foresee CREM as a physical
provider, only led to misunderstanding of other CREM contributions in supporting
organisational goals. This indicates that CREM executives need more effort to
communicate its capabilities to the customers.
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Corresponding author
Abdul Jalil Omar can be contacted at: jalil@uthm.edu.my
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