KPMG analysis of the annual reports relating to the UK’s largest property developers reveals that usage of the term ‘customer’ has increased 160%, compared five years ago.
KPMG analysis of the annual reports relating to the UK’s largest property developers reveals that usage of the term ‘customer’ has increased 160%, compared five years ago. Meanwhile, use of the term ‘tenant’ has declined by 30% compared to five years ago.
Almost all (96%) global institutional real estate investors recognise that an increased focus on both customer and user experience is critical to achieving successful investment outcomes over the next five years2, according to a recent KPMG poll.
Commenting on the findings, Andy Pyle, UK head of real estate at KPMG, said:
“A focus on customer-centricity holds the key to remaining relevant and successful. KPMG Nunwood found the UK’s top-10 brands achieved 10-times the revenue growth of their FTSE 100 counterparts over the past five years. Meanwhile, brands that improve their customer experience see their revenues increase by as much as 10-15 percent, while the cost to serve reduced 15-20 percent.
“Historically the real estate industry has lulled itself into a false sense of security in believing that location alone equals a positive brand – those days are well and truly over. Property leases have become noticeably shorter, while flexibility, quality, experience and service have risen up stakeholder’s agendas – from fund managers to the end-users of physical space.
“The direction of travel is set and organisations are increasingly procuring a greater proportion of their space on a flexible basis. To cater for this, real estate companies are moving towards a service and value-added mind-set, recognising that these present new revenue streams. That might entail selling space on an all-in basis, charging according to use, or even managing offices and providing other consumables. The key will be building incentives to reduce the operating costs of a building for landlords, while attracting prospective occupants with your more tailored offering.”
Read the full KPMG report – Why brand and customer experience matter in commercial real estate.
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Notes to editors:
1 – KPMG’s analysis of ‘customer’ and ‘tenant’ references in the annual reports of traditional developers
In February 2019, KPMG looked at the latest annual reports of ten key traditional developers, focussing on use of the term ‘tenant’ or ‘customer’. The research highlighted increased instances of the word ‘customer’ in the annual reports, with usage increasing 160% compared to 5 years prior. By comparison, usage of ‘tenant’ fluctuated over the five year period, but ultimately declined by 30% compared to 5 years prior.
2 – KPMG MIPIM RE-Invest poll: Significance of customer and user focus on investment outcomes
On Tuesday 12 March, at the MIPIM RE-Invest event held in Cannes, France, KPMG UK polled 61 delegates from 53 of the world’s leading institutional investors about their thoughts on the significance of customer and user experience. Combined, the 53 institutional investors have an estimated value of £1,108bn – with property values derived from Real Capital Analytics.
Respondents were asked how they felt about the following statement: “A focus on customer and user experience in our building will be critical to achieving successful investment outcomes over the next 5 years”. Results: 54% strongly agreed, 42% agreed, 3% weren’t sure, while no respondents disagreed or strongly disagreed.
About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.