1. Federal Property Management Professor Andrew Baum September 19th 2014

2. Introduction How should government property assets be managed? Who owns the asset? Who manages and operates the asset? Models Owner occupied Leased Partnership operated

3. Ownership Capital availability Commitment to future liabilities Refurbishment costs

4. Management Office design and layout Building maintenance Facilities management

5. Model 1: owner-occupation Ownership provides control Fit for purpose facilities and management? Flexibility?

6. Model 2: leasehold Sale and leaseback can maximise capital receipts Shared control: who manages facilities?

7. Building 1 Private tenants Short leases Value: £900m psf

8. Building 2 Government tenant 20 year lease Value: £1,500 psf

9. Example: building 2 Government tenant, 20 year lease Rent £500,000, fixed Government bond yield: 7% Value?

10. Example: building 2 Government tenant, 20 year lease Rent £500,000, indexed to inflation Government indexed bond yield: 3% Value?

11. Model 3: partnership Operating partner owns asset Provides combination of space and facilities Flexible for occupier Expensive?

12. Summary How should government property assets be managed? Who owns the asset? Who manages and operates the asset? Models Owner occupied Leased Partnership operated What would a private business do? Is government different?