P&G goes global
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P&G goes global

Outsourcing: Corporates look out for savings

The announcement in November that consumer products company Procter & Gamble had signed an outsourcing agreement was further proof that the concept has fully entered the mainstream as a financing and efficiency-improving tool for corporates. Moreover, the global nature of the contract – and its scale – highlighted the vast potential for property outsourcing.

The three-year deal, the financial size of which has not been disclosed, covers portfolio management, transaction management, real estate brokerage, lease administration and strategic portfolio planning services for a portfolio of more than 150 million square feet of real estate, including plants, warehouses, offices, technical centres and other properties in more than 80 countries throughout north America, south America, Asia-Pacific, Europe, the Middle East and Africa.

The rationale for Proctor & Gamble’s decision – in consideration since 2001 – was straightforward, according to Jim Fortner, vice-president responsible for workplace and infrastructure solutions at P&G. "Fundamentally, our strategy is to enhance total shareholder return as much as possible and get maximum value out of our real estate assets," he says. "When appropriate, we reduce costs; where needed, we invest."

Specifically, Fortner says that managing a wider range of real estate strategies through one partner enables the company to increase efficiency and consistency, leverage scale and enhance service levels.

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