Abstract
This article proposes productivity analysis for evaluating the relative efficiency in corporate real estate usage across decision-making units. Using data from the Greek Telecommunications Organization (GTO), we measure the productivity of 127 branches using the number of employees and the total area covered per building as inputs and the number of telephony access lines as outputs. We apply three nonparametric Data Envelopment Analysis (DEA) models assuming: Constant Returns to Scale (CRS), Variable Returns to Scale (VRS) and Slacks-Based Measures (SBM), respectively. We discuss how the proposed approach can provide real estate managers and analysts a multi-informational tool that allows the quantification of targets and may serve as a guide tool for the efficient employment of real estate assets.
Acknowledgements
The authors belong to the Management Science Laboratory (MSL). Raphael Markellos is also Visiting Research Fellow at the Centre for Research in International Economics and Finance (CIFER), Department of Economics, Loughborough University, UK. The authors are grateful to OTE estate SA for providing partial financial support in this project. We thank George Petrou, Sakis Psathas and Michalis Kindinis for their suggestions and helpful discussions. Any remaining errors are our responsibility alone.
Notes
1 A number of professional organizations, such as the Industrial Development Research Council (IDRC), LaSalle Partners, Royal Institute of Chartered Surveyors (RICS), collect and publish ‘benchmark’ measures of corporate real estate performance. These measures are mainly ad hoc ratios and are reported across countries and industries.
2Congestion refers to the situation, whereby increasing (decreasing) one or more inputs decreases (increases) some outputs without improving (worsening) other inputs or outputs.