Business occupiers require property advice to inform a range of strategic and operational business decisions (Weatherhead 1997). Property advice to business occupiers needs to be linked to the core functions of the business, and valuers need to appreciate the implications that property has for business processes.
The regularity with which these decisions are made, and consequently the need for property advice, depends on the type of business, but there has been a market-wide increase in this area of business decision-making due to rationalisation of, and increased accountability for, property assets.
The research revealed that a significant proportion of businesses do value at least some of their property assets and report these market values in their accounts. Many use these asset valuations for additional purposes, including performance benchmarking, internal rent charging and buy/hold/sell decisions.
Business occupiers are comparing their own assessments of worth with market values (albeit modified to existing use value for operational property) as a decision rule. Thus valuations are used to help inform operational and strategic property decisions. Business occupiers want property advice over and above an asset valuation, and consequently valuers are expanding into consultancy.
There has been increased scrutiny of property as a cost and an asset by business occupiers, and performance measurement and benchmarking are recent initiatives. Valuers are being proactive in identifying areas of property advice they can provide supplementary to an asset valuation instruction.
This is tailored to client requirements, which are becoming increasingly sophisticated. There is an opportunity for valuers to help businesses undertake their own appraisals of worth of business property. Ultimately, these appraisals will require a great deal of company-specific information, but an important first stage is to convince businesses that knowledge of the market value of their property assets provides the comparator for appraisals and is therefore fundamental to informing strategic property decisions.
Valuers need to convince clients that they are not overly technical in their outlook and have broad business skills that include strategic thinking and an awareness of business issues. In a consultancy role valuers can provide strategic advice over the long-term in the form of worth appraisals and performance measurement based on value rather than cost. This will provide valuers with a more central role in operational and strategic property decision-making by businesses.
