The relevance of strategic property asset management in Botswana

Abstract

The purpose of this study was to examine the relevance of strategic property asset management in Botswana and to determine the place of property management in corporate strategy in Botswana. Little has been documented about corporate strategic property asset management in developing countries such as Botswana. Similarly, little attention has been paid to the place of strategic property management in corporate strategy. The literature reveal that there is a need for the strategic property asset management principle to be clearly placed and to be taken account of at the highest level of corporate decision making in any organisation in order to strengthen the role of the property portfolio. This in tum requires the establishment and development of a sustainable in-house expertise in the application of Strategic Property asset Management (SPAM) in order to boost future returns from the property portfolio of any organisation. The literature also revealed that effective application of SPAM required organisations to set performance objectives, measurable targets, and monitoring and evaluation procedures. The literature also indicated that an innovative property portfolio strategy could add millions to the bottom line of organisations. The subjects' of the study were the Bank of Botswana, Property Asset Management and Botswana Insurance Fund Management. The questionnaires were sent to these organisations and this was followed with semi structured interviews to clarify the issues which may not have been clear in the questionnaire. The results from the survey were analysed. The study revealed that: • The majority of organisations did not have clearly stated property objectives but rather the management was more reactive. • Property data and information systems required for proactive management such as costs were poorly kept and all the three organisations were not satisfied with the information they had and therefore had a more reactive management. iv • Most organisations did not have set performance measures to monitor property. • Two of the three organisations did not have the head of property management sitting in the Board of Directors meetings. • From the survey it is clear that property as a strategic resource has begun to take its rightful place in aJI the organisations. On the basis of the issues identified from the literature and the empirical study, the study recommended the following: • Corporate real estate professionals need to acquire general management ski lls to effectively manage property assets. This will enable them to understand the organisation's overall objectives. • Property audits should be used, as a tool to establishing what property the organisation owns, this will in volve having a data base that will give information needed to make strategic decisions. • Performance measures and guidelines should be established to assist in evaluating property performance. • Organisations should set clear objectives and translate them into property objectives which is a fundamental prerequisite to best practice in property management. • Top management, especially company finance managers, should encourage setting benchmarks for performance not only in investment terms, but in relation to cost management to avoid complacency in dealing with property assets. • A further study be done in two year's time to see how the above companies would have benefited from SPAM.