Real estate location benchmarking

Better understanding the competitive position of the sites in the portfolio.

Assignment

The client is a leading logistics and industrial real estate developer. The company has a significant portfolio in Czech Republic. The company wanted to get a better understanding of the competitive position of the sites in their portfolio versus other sites in surrounding countries like Germany, Poland and Austria. The benchmark would need to be conducted based on a relevant case study of a company that would be fitting with Czech Republic and the sites in scope.

Project summary

The real estate developer was one of the leading industrial and logistics real estate developers in Europe with a strong portfolio in Czech Republic and other Eastern European countries. The company was growing fast and needed to boost its marketing efforts in order to find customers for their sites.

Our approach

The project was conducted by first defining three industry cases: typical profiles of manufacturing and distribution operations of companies in e-commerce, life sciences and industrial products based on which the Czech locations were to be benchmarked versus sites in surrounding countries.

Two benchmark locations in Austria, two in Germany and two in Poland were selected for the benchmark.

Based on our experience in doing location selection projects for this type of companies a comprehensive set of Cost, Quality of the Business Environment and Risk Factors was defined, including relative weightings.

The cost analysis included calculating the inbound and outbound freight costs, the real estate costs and the labor costs for each of the locations in scope.

Then we gathered data for each qualitative factor and each location in scope and based on that scored each location and calculated the weighted average scores for quality of the business environment and risk.

A Cost/Quality/Risk matrix was then constructed for each of the three industry cases to show the relative positioning of the Czech Republic sites versus the competing sites in other countries.

This analysis showed the client where the strengths of their sites in Czech Republic are. It also uncovered factors where these sites are not as well positioned as some other competing sites, so that the developer could take that into account in the further marketing of its sites.

Result

We developed a detailed benchmarking report with full details on the data used, the scoring methodology and the positioning of our client’s sites versus the benchmark sites. We also made a management summary report with a focus on the identification of strengths and weaknesses on site but also a national investment climate level.

“We will take the learnings from this study into account in our own daily practice but also bring them to our national stakeholders so that we can work on improving the overall investment climate in Czech Republic”