RBS to Review Global Property Portfolio

Property Week - March 13, 2009

The Royal Bank of Scotland is embarking on a review of its vast operational property estate.

The beleaguered bank, which is majority owned by the UK government, is reviewing its global property contracts and is seeking consultants to advise on how it can save money and increase efficiency on its global property portfolio.

RBS, which owns global brands such as ABN Amro and NatWest, is likely to look to rationalise its estate as it cuts jobs.

It may even hive off certain elements of its business into a ‘non-core’ function.
In its 2008 results, the bank, which has cut at least 3,000 jobs, made a loss of £24.1bn – the biggest in British corporate history.

Chief executive Stephen Hester, formerly of British Land, is now looking to save costs in all parts of the business.

An RBS spokeswoman said: ‘We are constantly looking at our global property to ensure we have the optimal structure in place and that our property assets remain relevant to the needs of our businesses.

‘We have building blocks in place for a five-year strategy to restore the company to strength and our property assets will be given careful strategic thought by the new board.’

RBS’s latest results show that it spent around £1.7bn on maintaining its own property in 2008, up from £1.5bn in 2007, because it invested in developing its corporate banking branch network.

t is thought that Juliet Filose, who joined the RBS property team under director of group property Barry Varcoe last year, is leading the search and has appointed consultancy Corporate Property Advisers (CPA) to help select the new advisory team.

CPA was unavailable to comment.

The new contract is likely to take the form of an ‘integrated services’ contract, where one firm or a small group of firms cover all the necessary services across global property.

It is likely to begin with transactions management and lease advisory, and move on to other functions such as facilities management at a later date.

RBS has traditionally been ahead of the curve in managing its property costs and realising value. For example, it completed a sale and leaseback on £750m of its UK property to Telereal and Prupim at the end of 2007.

At present, DTZ and Grubb & Ellis advise RBS on a global basis and NB Real Estate, GVA Grimley and Drivers Jonas provide management advice in the UK. Sphere: Related Content