The management of Royal FloraHolland have been devoting increasing attention to real estate in recent years, and it now represents more than half of the company’s total assets. This means that risks relating to real estate could have a major financial impact on the organisation. The emphasis within risk management at Royal FloraHolland is on the financial domain. Yet this creates the feeling that perhaps not enough attention is being paid to other types of risk.
The real estate department at Royal FloraHolland wants to be able to manage risks proactively and asked AT Osborne to help take their risk management to the next level. To do so, we need to focus strongly on the CRE risks, including risks on a strategic, and not just a financial level. Royal FloraHolland posed us the following two questions:
- Content: Where are our blind spots in the area of CRE risk management?
- Process: How can we create a link between the financial organisation and the real estate organisation?
The quick scan
Royal FloraHolland is not the only organisation asking these questions. As real estate is often capital intensive, small real-estate risks can have major financial consequences for the performance of the organisation as a whole. The financial risks are generally all that is considered, but other risks may well remain under the radar. To make sure that property-related risks are kept under control and managed proactively, we at AT Osborne have developed the CRE risk management quick scan.
Being aware of the blind spots
Based on a document review, interviews with stakeholders at Royal FloraHolland’s real estate department, and the unique AT Osborne risk benchmark, we suggested some practical recommendations to make the management of real-estate risk more professional and to highlight the blind spots of risk management. In doing so we went outside the real estate domain and created more synergy between facility management, CRE management, risk management and finance.
Focusing on the critical issues
For us at AT Osborne, this was an unusual project. The constructive attitude at Royal FloraHolland throughout meant that the process ran quickly and smoothly. During the interviews, we asked extensive questions to uncover the critical issues, allowing us to deliver a report with specific proposals to take the CRE risk management process at Royal FloraHolland to the next level.