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PUBLIC SECTOR PROPERTY ASSET MANAGEMENT
Policy, strategy and implementation: discontinuity of interest at the operational
level − Case study of Budapest"
PAL BAROSS FRICSAssistant to the Deputy Mayor for
Municipal Finance and Assets BUDAPEST MUNICIPALITY
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The „British experience”
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THE POLICY PROPOSITION
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MAGNITUDE OF ALLOCATION TO FUNCTIONS
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MY „PAST” AS A DEVELOPER
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MY OFFICE PROJECT
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OFFICE ENVIRONMENT
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MY „PRESENT” AS A PUBLIC EMPLOYEE
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“all and all it is just another brick in the wall...” Pink Floyd
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WHAT BUDAPEST CITY OWNS – AND WHY?
1. Land and buildings used to deliver a direct service to the public – for example, schools, health centers, elderly persons’ homes, residential units, public parks, cemeteries, …..
2. Those that support service delivery in some way – most notably the town hall and other local administrative offices, vehicle depots…...
3. ‘Non-operational’ property – that is, property which is not used for, or in support of, mainstream service delivery. This includes commercial and industrial property and surplus property awaiting sale
4. Infrastructure companies….. and their property assets
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WHAT DO WE OWN?• In terms of property types? (schools, libraries,
swimming pools, community halls, leisure centers, office space, industrial space, flats, theatres, movie halls, hospitals, health centers …) NO IDEA
• In terms of values (price, operating costs, efficiency of use, environmental footprint..) NO IDEA
• In terms of legal structure of holding (freehold, condominium, contested ownership, rent…) NO IDEA
• In terms of budget allocation within the overal municipal budget what realistic savings to be achieved from rationalization, disposal or redevelopment. NO IDEA
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WHO MANAGES IT?
• There is a fragmented management structure of companies, agencies, committees, institutions, departments with un-transparent budgets, non-existent benchmarks, ad-hock decisions about use, disposal or refurbishment.
WE HAVE NO IDEA HOW MUCH RESOURCES ARE TIED UP IN THE BUDAPEST MUNICIPAL PROPERTY PORTFOLIO
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OUR APPROACH
PRIORITIES:1. CREATE A MANAGEMENT INFORMATION CENTERD
PROPERTY INFORMATION SYSTEM (CADASTER)2. USE PROPERTY AS A SUPPORT FOR SERVICE DELIVERY3. CONSOLIDATE PROPERTY MANAGEMENT FUNCTION
IN A SINGLE ORGANISATION4. ALL FUTURE RUNNING, MAINTENANCE,
REFURBISHMENT OR DEVELOPMENT DECISIONS WILL BE BENCHMATKED AGAINST „ECOLOGICAL FOOTPRINT”
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Dr. Gabor Bagdy MRICS, Deputy Mayor for Budget and Assets, Budapest
OUR BUSINESS DISCILPINE
Asset management includes strategic considerations as well as a range of property services.
STRATEGIC ISSUES•ACCOMODATION REVIEW AND SPACE MANAGEMENT•PROPERTY INFORMATION•BUDGET MANAGEMENT•ENERGY MANAGEMENT
PROPERTY SERVICES•LEASE MANAGEMENT•BUILDING MAINATENANCE•VALUATION
AQUISITIONDISPOSAL
REFURBISHMENT
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ASSET KADASTER
CORE ASSET DATA
SITE
BUILDING
TENANT AREA
ADDITIONAL DATA
VALUATION
CONDITION SURVEY
RUNNING COSTS
OCCUPANT(S)
LEASE TERM(S)
SPACE USE BENCHMARK
ENERGY USE BENCHMARK
USER DEMAND FOR IMPROVEMENT
ANNUAL PROPERTY REVIEW1. PROPERTY COSTS
2. PROPERTY REVENUES
3. INVESTMENT BUDGET
4. DISPOSAL REVENUES
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SIGNIFICANT ASSET ISSUES
PHYSICAL UPKEEP
VALUECASHFLOW
FIT FOR PURPOSE
SUSTAINABILITY
USER/OCCUPIER
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WHERE TO PUT THE EMPHASIS
THE REAL ESTATE ASSET
SERVICE ORIENTED STRATEGY BUSINESS ORIENTED STRATEGY
OBLIGATORY VOLUNTARY BUSINESS VACANT
PHYSICAL UPKEEP FIT FOR PURPOSE CASHFLOW MARKET VALUE SUSTAINABILITY
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A building fit for the purpose, in the right location for users, can make the difference between a good and a poor service.
THE NEW MANTRA
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THE THEATRE PORTFOLIO
OWNERSHIP
UPKEEP OBLIGATIONS
OCCUPANNCY RIGHT
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USER MANAGED MODEL
MUNICIPALITY PUBLIC COMPANY THEATRE
ASSET OWNER
ASSET MANAGER
ASSET USER
NO PROPERTY RENT + SUBSIDY FOR PROPERTY OPERATIONS
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„QUASY” ASSET MANAGER MODEL
MUNICIPALITY PUBLIC COMPANY THEATRE
ASSET OWNER
ASSET MANAGER
ASSET USER
PROPERTY RENT + MORE SUBSIDY FOR OPERATIONS
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