ABSTRACT
Property is important for firm performance because ‘the premises in which the firm operates impose constraints on the nature of its operations and may limit its growth and efficiency’ (Fothergill, Monk and Perry 1987). Manufacturing firms incur considerable additional operating costs when they occupy old, substandard premises (Bozeat and Williams 1979). A move to modern, well-designed accommodation can be expected to reduce maintenance and energy costs significantly and to result in dramatic improvements in efficiency via better plant layouts and the proper utilization of floorspace. Empirical evidence of efficiency gains is hard to come by. However, there are case studies which describe moves resulting in increases in floorspace productivity (output value per square metre) of 227 per cent (Building Employers’ Confederation, 1985) and 191 per cent (Strachan 1986) over that in an older unit. This being the case, it is clearly important for firm performance, and for the performance of the local and wider economies of which they are a part, that premises meeting their needs are available. However, the property market is not homogeneous. Different types of firm, depending on their size, organizational status, the product with which they are involved and the activities which they pursue will require a similarly differentiated range of buildings. Furthermore, structural economic and industrial change will alter the balance of demand for different building types both between sectors – for example the dramatic growth of the service sector relative to manufacturing resulting in a similarly large increase in demand for retail and office premises – and within a sector – for example the increase in expenditure on DIY and bulky goods leading to the development of the retail warehouse.
