1. Abdul Jalil Omar Mohd Lizam Mohd Diah Azlina Md Yassin
Exploring Financial Performance for Corporate Real Estate Management in Malaysia
Abdul Jalil Omar
Mohd Lizam Mohd Diah
Azlina Md Yassin
International Conference on Technology Management, Business and Entrepreneurship (ICTMBE) 2015, Melaka

2. Presentation outlines
Introduction to CREM
Background of research
CREM
CREM setbacks
Internal service branding – CREM
Building CREM brand
The methodology
Findings
Conclusion

3. Introduction to CREM
Corporate real estate is the land and building owned by companies not primarily in the real estate business.
Second highest cost (20-30%) after staff cost
Matching real estate needs to business needs is an obvious requirement in the profit potential of every business.
Corporate real estate (CRE) is an important but under-recognised organisational resource.
The management of corporate real estate (CREM) considered as an internal service for organisation.
Significant contributions to organisation’s success or failure

5. CREM Contributions CREM’s Function Contributions Physical
Provide and manage workspace
Data storage and tools to manage physical objects
Corporate site selection
Provide conducive workplace design
Financial
Financial flexibility in changing environment
Cost reduction
Owning or leasing decision
Human
Boost employee satisfaction
Shifting ‘cost reduction paradigm’ to ‘value added paradigm’
Capital Market
Increase shareholder wealth
Liquidise capital for uncertainty

6. Research problem
Corporate real estate management (CREM) in Malaysia is still a new concept.
CREM is relatively under-developed and under-estimated.
Without the understanding of CREM financial contributions, corporations still have negative perception towards CREM as a cost-centred function only.
Understanding CREM financial performance opens to greater engagement in a company-wide strategies and the Malaysian economy as a whole.

7. Methodology Objective Methods Instrument Potential Outcomes
To explore CREM practice among the Malaysian corporations
Quantitative
Document analysis
Top 100 companies in Main market at Bursa Malaysia
Review of financial statement from annual report.
Real estate contributions
Real estate policy and governance

8. Methodology (cont.) Source of data:
Financial statement extracted from Bursa Malaysia
Data bought from Bursa Malaysia Knowledge centre
Top 100 companies (here)
Data analysis based on Wills (2008)
Sector:
Consumer products
Industrial products
Trading/ services

9. Data Analysis (wills, 2008) Property as percentage of total asset
Return on property
Property value per employee
Property value increase or decrease
Property as percentage of operating cost

10. Comparison between Sectors for Property as Percentage of Total Asset

11. Petronas, Kerteh, Terengganu

12. Comparison between Sectors for Return on Property

13. Comparison between Sectors for Property per Employee

14. Comparison between Sectors for Property Increase or Decrease

15. Comparison between Sectors for Property as Percentage of Operating Cost Ratio

16. Summary & Conclusion
Findings indicated that CRE ratio increase steadily along with the company revenue.
It is important for CREM to link its financial performance to business performance in communication to senior management.
Lack of details in real estate assets and business accounting standard presents difficulties in justifying real estate performance.

17. Thank You