Strategic REC

Question 1

What is an occupational or operational goal

Answer 1

• Operational goals – real estate is used to enhance the operational efficiency of the business; for example optimising the location of real estate.
• Occupational goal is used to enhance the workspace – e.g. improving energy efficiency in line with MEES, implementing hot-desking.

Question 2

You state that businesses use real estate for varying purposes; what are these?

Answer 2

• The purpose is dependent on the company; many businesses use real estate for occupational purposes, however many that CBRE deal with are structured around using real estate for financial or investment purposes. In particular in my work, for the development of land for residential schemes (to benefit from sales) or BTR schemes (to benefit from long-term income).

Question 3

What are some examples of company’s objectives? How does this affect the advice you give?
Could be:

Answer 3

• To implement cost savings and efficiencies
• To seek a return on their investment
  Understanding objectives helps to shape the advice given and informs the strategic recommendations.

Question 4

How does your role provide strategic real estate consultancy?

Answer 4

Strategic advice that I have provided in my role has largely been regarding the acquisition and disposal of development land, where the client has been targeting a Profit on Cost in line with the business objectives.

Question 5

Is return on capital employed another way look at profit on cost?

Answer 5

ROCE - financial ratio that measures a company's profitability and the efficiency with which its capital is used. Operating profit/capital employed.
Development yield (POC)

Question 6

[Reading] What was your strategic advice to the client?

Answer 6

Marriage vale, placemaking, acquisition prices for parcels.

Question 7

[Reading] What was the client’s objective? What was your instruction?

Answer 7

To determine the appropriate purchase price for the four parcels of land, whilst ensuring that a POC of 22.5% can be achieved for a residential development. We were instructed to conduct a desktop review.

Question 8

What were the warehouses used for? What is their use class?

Answer 8

Uses classes – a mixture of B8 storage and B1c – light industrial.