Internal rent – experiences from public sector in Norway

Abstract

Purpose – The purpose of this paper is to identify the advantages and disadvantages of introducing internal rent and to find the main success factors when introducing internal rent. Design/methodology/approach – This paper’s analysis is based on experience from the introduction of internal rent models within four major Norwegian public organisations. The experience is documented after 19 semi-structured interviews with stakeholders representing the client organisations, property management and tenants. Findings – The major advantage consist in that internal rent compels the different users to discipline concerning the use of space and make them adapt their use to fit the real needs and demand for space suited for their primary activities. The main disadvantage of internal rent consists in the temporary organisational noise that results from the introduction and the permanent extra bureaucratic burden it causes. The success factors for introduction of internal rent are: the users need to perceive the model as of real importance, the property management must take in enough funds to assure reliable maintenance and the client needs to avoid that the tenants think the model is constructed to seize funds. Originality/value – The authors discuss a market-orientated approach to property management, namely, introducing internal rent models. It is more than a decade ago since internal rent was first introduced in the analysed public organisations. Now it is possible to identify the success factors – related to the advantages and disadvantages – from this introduction.