From Ageing to Ageless: why your building portfolio is your biggest hidden liability

Across the world’s major cities, a quiet crisis is unfolding on corporate balance sheets. It is not found in a sudden market crash, but in the bricks, mortar and steel of existing infrastructure. Around 80% of the buildings required for 2050 already exist today, yet many are ageing faster than capital is being injected to maintain them.

At the same time, the way organisations use space is changing rapidly. Hybrid work, fluctuating occupancy and rising expectations around workplace experience mean buildings must now perform in new ways, often with ageing infrastructure that was never designed for today’s patterns of use. Pressure is also mounting from tightening carbon regulation, growing insurance scrutiny and the rising cost of capital, all converging to create a growing backlog of unfunded capital liability.

“When you only optimise locally, you miss where the real risk sits.”
Evrim Veli Ay, Global Technical Services Lead, ISS

When deferred maintenance becomes technical debt

For many real estate and FM leaders, that risk remains largely invisible. What begins as deferred maintenance slowly becomes technical debt, quietly eroding asset value, carbon performance and day-to-day continuity across an entire portfolio. This is what makes the issue more than operational. Buildings are not simply assets to be kept running. They are financial, operational and environmental assets whose performance has a direct bearing on resilience, capital allocation and long-term value.

The limits of site-level thinking

Yet most organisations still manage real estate and technical assets one building at a time. Maintenance budgets are allocated site by site. Asset replacements are triggered by failures. Capital plans are developed locally rather than strategically. On the surface, that can look practical. In reality, it often leads to what Evrim Veli Ay, Global Technical Services Lead at ISS, calls local optimisation – fixing problems in one building without considering the impact of the wider portfolio. It may resolve an immediate issue, yet leave the portfolio’s greatest risk untouched.

“When you only optimise locally, you miss where the real risk sits,” Ay explains. “The question should always be: where will this investment create the greatest value across the portfolio?” That question is becoming more urgent as organisations try to balance ageing assets, cost pressure, decarbonisation targets and changing workplace demands all at once.

“The question should always be: where will this investment create the greatest value across the portfolio?”
Evrim Veli Ay, Global Technical Services Lead, ISS

What poor visibility can cost

One example makes the point clearly. A global consultancy customer had dismissed long-term capital planning as unnecessary complexity until ISS connected asset condition data with lease expiry strategy. The analysis revealed the organisation was preparing to spend £1 million replacing assets in a building it was planning to vacate within 12 months. ISS eliminated that entire project. But the real shift was not the saving itself. It was the change in how the organisation sequenced capital priorities across its estate. Asset condition, lease strategy and capital planning were no longer separate conversations.

That is the wider issue. Hidden liability is not only about assets that fail. It is also about money being directed to the wrong place, at the wrong time and with too little visibility across the portfolio. What looks like prudent site-level management can, over time, become a portfolio-wide financial blind spot.

A growing pressure on portfolios

And the pressure is only growing. Most future building stock already exists, yet much of it is under strain. Carbon expectations are rising. Capital is more expensive. Workplace demands are shifting. The challenge now is no longer simply how to maintain buildings, but how to recognise and manage the financial, operational and environmental risk embedded across an entire estate before it becomes more costly to fix.

The organisations that move first will not necessarily be those with the most advanced systems and technologies, but those with the clearest view of where risk is accumulating, where value is being lost and where capital should be directed first. At its core, this is a question of visibility: do you know where your greatest portfolio risk is hiding?

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