Managing real estate value - not only for real estate development companies (page 2 of 2)

The Group has now implemented Oracle Financials and Oracle Property Manager to streamline accounting, forecasting and lease management activities relating to its property portfolio.

"We now have transparency of costs and commitments group-wide, and can assess our working capital requirements on a weekly, monthly or yearly basis," says Atallah. "Monthly close times are down from 45 days to six in some business units, and we can complete cash forecasts in minutes - a process that used to take four working days."

Implementing one single system for property management and financial accounting has also enabled Al Ghurair Group to optimise its lease revenues through automated contract management. "The workflow built into Oracle Property Manager also generates substantial savings in property management by ensuring that leases on our hundreds of retail outlets are renewed on time," says Atallah.

Users of Oracle Property Manager often also choose to implement the integrated Oracle Enterprise Asset Management module, which can automate, track and report on all areas of facilities management across a large and geographically dispersed portfolio of property.

Al Ghurair Group is just one company that is using Oracle Enterprise Asset Management in tandem with Oracle Financials and Oracle Property Manager, to better manage the routine and ad hoc maintenance for the upkeep of its buildings, plants and manufacturing operations.

Al Ghurair's experience touches on an area that is of significant interest to CFOs and real estate managers alike - how to achieve the optimum balance between real estate costs and real estate revenues.

For some companies, the idea of generating revenue through the corporate property portfolio may be an alien one, with property being treated simply as a cost. Yet if properly managed, revenues can be recognised through the timely disposal of property that has increased in value or through profitably subletting unused or under-utilised space.

A comprehensive property management system can help identify the ideal times to consolidate or dispose of property by tracking the value of property assets and those located close to it. On the sub-letting side, the GIS elements of modern property management systems can help optimise the occupancy of existing space and identify areas that can be effectively sublet.

Automated lease management features, meanwhile, can help create and manage sub-leases and ensure that rent is collected and renewals conducted on a timely basis - thus reducing administrative overhead, optimising cash flow and ensuring that space does not remain vacant and a drain on finances.

With the implementation of a centralised property management system, real estate managers will not only be able to provide the improved financial data required for compliance with IFRS, but will also be able to gain greater control of the myriad costs and contractual agreements involved with managing a corporate property portfolio.

The result is lower costs, better opportunities for revenue generation, and the ability to manage corporate property strategically - resulting in greater recognition and appreciation of the property management function not only by the CFO but also at Board and shareholder level.