Experience

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Delivered more efficient use of space

Situation

  • The client is one of the largest heat power companies in Moscow, seeking to make additional money out of immovable property
  • Previously, real estate was almost never utilized to create additional revenues: less than 2% of the building owned were put out to rent
  • In the summer of 2013 a project was conducted to optimize real estate management in a pilot branch. The client wanted to replicate the experiences gained and the positive economic effect in other branches

Goal

  • Analyze the real estate belonging to the client’s subsidiaries in the Southern District and Central District of Moscow, as well as provide a real estate survey
  • Analyze the possibilities of increasing efficient use of the surveyed property (including for rent, sale and other uses)
  • Selecting priority sites where activities could be implemented
  • Investigating the options for the priority assets, assessing them, and assessing the economic effect from implementing the plans
  • Developing implementation plans for the priority real estate items

Our approach

  • The project was implemented in two stages: ) selection and conducting of surveys, and b) identifying and approving the options for use for the priority assets. After approval of the project’s results, a program of action in all of the property assets was rolled out and replicated across all of the client’s subsidiaries

Results

  • At the different real estate assets assessed, the inefficiently used volumes and spaces were identified. In total, more than 12% of the total square-footage of the client’s buildings in the Central District were inefficiently used, and 9% of the total area of client buildings in the Southern District.
  • 18 priority properties were selected (9 in the Central District, 9 in the South). The options for best use were analyzed for each of these. The highest profit potential (NPV) for each asset was identified, along with the option producing the least risk when actually being implemented

 

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