Corporate real estate practices in South Africa - a survey of the top 200 companies listed on the Johannesburg Stock Exchange
Purpose – The purpose of the study was to develop a baseline decription of the current state of corporate real estate management within South Africa. Design/methodology/approach – A combined online/paper questionnaire was administered on the top 200 firms listed on the Johannesburg Stock Exchange. Findings – Majority of the firms have no formally organised real estate unit. A few have only recently organised formal real estate units as a department of the company, reporting mostly to the CEO even though the latter seldom gets involved in Corporate Real Estate decision. The CFO appears to be the one in charge of corporate real estate decisions in most of the firms. Majority of the firms own, rather than lease their corporate real estate due to location, transport advantages, minimisation of the risk of rent changes and community links that are advantageous to their business effort. The principal reason for leasing was the flexibility it affords in relocating in future. Other issues covered include the cost treatment of using CRE, the importance of CRE management, in-house management and outsourcing of CRE services and the criteria for selecting an external CRE management service provider. Business Implications – Service providers need to take into account specific criteria used by respondent firms in the selection of who manages their corporate real estate. Originality/value – This paper provides the first comprehensive description of corporate real estate management on the Johannesburg Stock Exchange.