Global real estate adviser DTZ surveyed local authorities across the UK about their property portfolios and found that, despite the pace of change accelerating, the state of ageing buildings is impacting costs and productivity.

Over 40% rated their property portfolios as being in either poor or very poor condition with 90% of respondents' holding portfolios where the majority of stock is over 20 years old.

DTZ's survey found that local authorities are rationalising and upgrading their property portfolios primarily to improve operational effectiveness and to reduce costs. When considering what is driving change in property portfolios, the desire to kick-start regeneration has been one of the lowest priorities, with only around 40% rating this as important or very important. This compares with operational efficiency, cost reduction and building condition, all at over 90%.

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Richard Grass, Director of Corporate Real Estate Consulting at DTZ commented: "This bears out DTZ's own experience that regeneration benefits are quite location specific. They are usually a spin-off benefit of a major consolidation, such as the release of surplus council assets for redevelopment, rather than a key driver."

The survey revealed that nearly two thirds of local authorities have sold off offices in order to save money.

However, the pace of change within local authority property portfolios appears to be accelerating, with around 43% reporting significant change over the past five years and 65% saying that they currently have change initiatives planned, including a range of measures from refurbishments to consolidations.

50% of councils say that change projects in their property portfolios have significantly contributed to improvements in staff performance. Over 40% of respondents reported significant success in implementing new workplace strategies including flexible working, improvements in space utilisation ratios, and reductions in staff to desk ratios.

Mr Grass said: "Authorities need to focus on capturing the productivity benefits of major workplace change. It will strengthen future business cases and give the wider local government community the confidence to press ahead with projects where the economic case appears marginal."

(CD/JM)