Infrareal as Best Owner for site management

Infrareal as Best Owner for Site Management

You are thinking about outsourcing your infrastructure? There are plenty of options, i.e. outsourcing models : You could keep ownership of properties and infrastructure assets and just outsource the operations. It is an easy-to-implement-model but strategically a no-go. This model will result in ceasing any integral one-stop-shop philosophy, no or double coordination between the interlinked services and no interest or responsibility for site development. The infrastructure cost will increase. Past experiences confirm these statements.

In order to facilitate an integral site management it is best to sell ownership and operation of the infrastructure.
Which type or category of owner is best therefore? Here potential owners and the pro’s and con’s to own and operate industrial sites:

Customer/User   

  • Strategic conflicts

Private Equity

  • No long-term strategy
  • Security of supply has not first priority
  • Financial performance trap: Higher complexity of infrastructure business than expected

Focussed strategic investors (such as energy suppliers, real estate owners, facility managers, industrial maintenance companies):

  • Interest limited to activities of his own business
  • No thrive for professionalism in other activities
  • No approach as total solution provider, customers have to manage interfaces and complexity
  • No site development

Several investors
(break-up of infrastructure)

  • Several complex interfaces between the service providers but also towards the customers (site users)

Strategic investors in site management

  • Site management as core business:
    • Security of supply
    • Optimal solution provider and optimal customer interfaces
    • Site development
  • Customer/User as Owner vs. Infrareal as Strategic Investor

    Customer/User = Owner

    Infrareal = Owner

    Capex limited to actual customers

    Capex also in order to ensure future growth (Site operation and site development)

    Limited capex for new tenants

    Strategic and entrepreneurial view of market

    Owners represent the thinking of users (their core business) and not the thinking as site manager

    Optimisation and development from the viewpoint site management = core business

    Owners are only represented as site managers (no conflict of interests)

  • Private Equity Corporations as Owners vs. Infrareal as Strategic Investor

    Private Equity Corporations = Owner

    Infrareal = Owner

    Short-term view and optimisation

    Long-term, industrial view

    Security of supply has not first priority

    Most important goal is to become “Partner of choice” for the relevant customers

    Investments with life cycle optimisation are not done

    Investments if economic long-term return is given

    The necessary thrive for professionalism is subordinated to minimal costs

    Infrareal has a proven track record in the professional service management

    Threat of break-up of the site management company with subsequent increase in complexity for customers

    Infrareal’s site management companies have a full-range service portfolio, i.e. are integral site operators

  • Strategic Investors* vs. Infrareal as Best Owner for Site Management

    Focussed Strategic Investors = Owner

    Infrareal = Owner

    Focussed interest for activities of their own core business. A large share of services is subcontracted. Increase in complexity

    Integral site management as core business

    No thrive for professionalism in acitivities not part of their own core business

    Total solution provider and optimal interfaces

    No approach as total solution provider, customers have to manage interfaces and complexity

    Total solution provider with internal make- or buy optimisation

    Oppurtunistic site development – if any

    Strategic site development based on strenghts and USP’s of the site is an important task of a site management company

    Defensive strategy in order to protect the group´s core business

    Innovative, trans-sectoral solutions

    Modular defined and coordinated service offering

    *Energy suppliers, real estate owners, facility managers, maintenance companies

  • Several Focussed Strategic Investors* vs. Infrareal as Best Owner for Site Management

    Several Focussed Strategic Investors* = Owner

    Infrareal = Owner

    Several complex interfaces between the service providers but also towards the customers (site users)

    Integral site management

    Overlaps and duplications of service lead to inefficiencies and increase of costs

    Optimal solution providing and optimal interfaces

    No modular definated and coordinated service offering

    Internal make- or buy optimisation

    Strongly varying degrees of professionalism

    Strategic site development based on strenghts and USP’s of the site is an important task of a site management company

    No perpection of site management as a whole – particular interests

    Innovative, trans-sectoral solutions

    No site development – who pays?

    Modular defined and coordinated service offering

    Customer management: One-face-to-the-customer approach

    * Energy suppliers, real estate owners, facility managers, maintenance companies