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The importance of understanding demand and capacity within real estate portfolios

19 January 2023


The COVID-19 pandemic has been a catalyst for organisations to reassess their real estate portfolios; how it’s used, what it costs, and how much space is required. A data led approach to managing real estate enables organisations to configure their estate to meet their operational requirements. Something that can act as a strategic driver to unlock value and deliver organisational objectives.

For an organisation to plan its future estate it needs to understand what it currently has, how that is currently used, and benchmark that against what it needs both now and in the future. This is a Demand and Capacity Assessment and is the first step organisations should take prior to the development of key strategy documents, be that estates, capital, workforce, or digital.

Demand and Capacity Assessments can be broadly broken down into three main strands, but it is important to note that these approaches are often blended to achieve the optimum and comprehensive outcomes sought:

  • The ‘oversized versus undersized approach’ – Establishes whether their current estate is appropriately sized for their respective staffing levels and operational requirements. This is a simple assessment based on best-practice space guidance.
  • The ‘reconfiguration approach’ – Helps organisations to take advantage of the opportunities provided post-COVID-19 in terms of new ways of working, whether this be hotdesking, open-plan space or virtual and remote working. The method builds on the previous approach but focuses heavily on the redesign, reconfiguration, and reimagining of space and the way occupants interact with it.
  • The ‘service-led approach’ – Focuses on deepening the understanding of how, by whom, and when the estate is being utilised at a service level. This allows organisations to make quick decisions in terms of the make-up of their asset portfolio. It allows them to optimise their space in the short-term, or plan strategically for the medium to long-term. This service led approach helps realise opportunities for rationalisation, relocation and/or disposal.

The scope of these investigations is to provide an evidence-based approach for understanding the estate from a utilisation perspective.

They enable organisations to ensure decisions are supported by data analysis and evidence, rather than solely relying upon subjective experience, which can be anecdotal or skewed. It allows us to test the assumptions that arise from the experiences of building users. To ask better questions of the estate – where it’s at, where it needs to be – and to have a better understanding of how it can be optimised.

Whilst projects and opportunities will be identified through these investigations, the primary intention is to inform decision-making, justify the case for any intervention and demonstrate value for money in doing so, rather than to identify specific schemes that require consideration.

Under-utilised and inefficient properties represent a significant financial burden to our clients. It presents them with an opportunity to develop a data-driven strategic approach to estate management, the first step to modernise, improve, rationalise, and unlock value.

Demand and Capacity Assessments should be seen as a ‘corner piece’ within the jigsaw of how companies should look to strategically manage their real estate portfolios going forward. Future demand is the key driver when defining investment plans and by better understanding current capacity through evidence and data, solutions can be developed that unlock value in the process.