Real Estate: Internal Space Management

This Business Scenario Map shows the processes that a company’s internal real estate department deals with on a daily basis. The map illustrates the collaboration between three business partners - the user of space, the real estate manager and the service provider. The user of space is typically a department or a cost center within the organization. The real estate manager represents the company's corporate real estate (CRE) department. Activities include managing the rental of internal space, carrying out space and occupancy planning, performing portfolio analysis, processing lease contracts and internal agreements and monitoring contractual data. The CRE manager also rents additional space for his company from external providers. The scenario demonstrates how the internal department requests additional space and how the CRE manager manages space requirements and maps contractual agreements with the external space provider and the internal department.

Show Document Flow

Business Benefits

Make better use of available resources, cut costs, and respond quickly to needs

Flexible space and room management with integration to CAD/CAFM systems

Real estate portfolio transparency

Transparent cost allocation

User of Space

Real Estate Manager

Provider of Space

Request for space

Controlling & management of framework agreement

Define framework agreement

Perform space & occupancy planning

Assign building to real estate portfolio

Update framework agreement

Negotiate contract & lease space

Contract management

Business Benefits

Record all contractual details

Efficient date tracking

Complete overview of payments made & payments due


Real Estate: Internal Space Management SAP Real Estate Management provides corporate users with everything they need for a comprehensive, strategic and operative management of all the real estate they lease or own. This Business Scenario Map outlines the process involved in corporate real estate management. An internal department, for example a cost center, project or order, requires more office space. The real estate manager is informed, and reviews the space available. Occupancy planning determines how much space is available within the company portfolio. This is compared with the amount of space required by the various departments. In the process the real estate manager can plan the occupancy of the space and then convert the plan to actual. Occupancy planning is supported with integration to CAD/CAFM systems. Having reviewed the space available, the real estate manager recognizes that there is a need for additional space for the corporation. He has a number of choices available to expand the real estate portfolio. He can choose to buy, build or lease-in additional space from a third party provider. In this scenario a building is leased-in from a third party provider to meet the demand for additional space. A contract is concluded between the real estate manager and the company leasing the building. All relevant information such as contract term, condition amounts charged for rent, payment methods, due dates, partner and object details, notice and renewal clauses, are recorded in the contract. The leased-in property is then added to the company’s portfolio. The internal department is allocated the space it requires, and the information is mapped in a framework agreement. The framework agreement is used to map all cost centers, projects and orders occupying space within the company. By previously defining who is occupying which space, it is possible to assign whole buildings to the framework agreement. All other relevant information is transferred to the agreement via the information maintained on the cost centers, rental spaces and buildings. The terms and conditions of the framework agreement are defined. These include occupancy duration, participation in service charges, rules for condition adjustment, as well as renewal and notice rules for limited agreements. Conditions (amounts charged for occupancy) can be defined according to various measurements, e.g. m2, persons. The conditions are apportioned to the cost centers, projects and orders using distribution routines. The real estate manager is therefore reponsible for the negotiation, management and monitoring of contracts drawn up with external parties, as well as the definition of framework agreements for the rental of space within the corporation. Throughout the external and internal rental processes, the real estate manager continuously monitors the contract terms and reviews all important dates for all lease and sublease agreements. Payments are made to the provider of space (landlord) for the lease of the building on a periodic basis. At the same time costs for rent and maintenance are allocated internally to the responsible costs centers, projects or orders. Costs and revenues are recorded directly on the real estate objects, providing complete transparency of costs at all reporting levels. Decision-making and investment strategies are therefore improved through accurate real-time cost and revenue performance data.