Industrial firms face financial risks by holding idle properties
Highlands Ranch, Colo. - Some of the world’s largest corporations have no strategic plans to sell or redevelop surplus properties, according to the 2017 Global Surplus Property Disposal Benchmarking Report published by Arcadis (EURONEXT: ARCAD), the leading global design and consultancy firm for natural and built assets.
Major corporations are often left with millions of dollars of idle surplus property; this occurs when industrial firms acquire new companies with redundant properties, automotive companies relocate plants, or oil and gas firms shut down a refinery or consolidate retail stores. This report, the first ever global surplus property management benchmark, examines reasons why progressive firms are finding success with their disposal plans while others struggle. It outlines key findings and highlights the steps taken by best-in-class firms to successfully and effectively dispose of properties.
Download the report at http://arcad.is/SP-2017ca_pr.
“With the industrial real estate market booming in western economies and the availability of property diminishing, now is an excellent time to take advantage of disposing of surplus property,” said Arcadis Senior Vice President Mark Fenner. “By planning strategically, corporations realize major benefits such as higher profits, an optimized asset portfolio, reduced liabilities, healthier balance sheets and an improved public image.”
The report surveyed executives from more than 30 large, primarily multi-national firms representing a variety of industrial sectors with a combined gross revenue of $1.5 trillion and approximately $2 billion in surplus property holdings in 2016.
Key findings from the companies surveyed include the following:
According to the report, successful companies are finding innovative solutions to disposal. For example, global energy producer Bayernoil closed a redundant, 266-acre German refinery. Arcadis assisted by helping to strategically break the property into parcels which could be sold to generate cash for remediation. Within two years, a parcel was decommissioned, remediated and converted into a 16,000-seat soccer stadium while the remaining property was sold and converted into a business park. This project improved the quality of life for residents and businesses and contributed to stronger bottom line performance for Bayernoil, according to Fenner.
To unlock the hidden value of redundant properties, Arcadis outlines several recommendations for corporate executives, including the following:
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