Category: FM Growth

ESG Leadership: Biggest Movers And Shakers In Real Estate & Facilities Management
In this article, we examine the “Top Movers” in the Real Estate and Facilities Management industries based on ESG impact, highlighting the companies that have taken the biggest strides towards decarbonization of buildings and bear the lowest environmental risk.

Companies now have a much greater responsibility to effect positive change on the environment. This begins with ensuring they’re not wasting energy and are proactively following sustainable practices as outlined in their ESG roadmap.

The same is extremely relevant for building owners, operators and managers because buildings are the source of almost 40% of the world’s carbon emissions. With a bold vision and clarity on the action required for sustaining business and the planet as a whole, a number of real estate and facilities management companies are leading the charge on ESG initiatives within the built environment. To achieve these targets, it has become extremely crucial to have sustainable facility management solutions for a carbon free future.

Let’s take a look at some of the biggest movers and shakers…

Dexus Property Group, Australia

Of the 52 real estate leaders that made it to the S&P Global Sustainability Yearbook for 2023, Dexus Property Group secured the top spot (Gold Class) with an industry best ESG score of 89.

In another score on ESG related risk by Morning Star company Sustainalytics, Dexus Property Group received a Negligible Risk rating of 6.8, the 9th best rating out of 1058 real estate companies in total.

Dexus recorded a 62% annual decrease in emissions intensity per employee in FY22. The company also met its target of 1 million sq. m. of office space rated at a minimum 5 star NABERS Energy. To reach this milestone, Dexus increased energy efficiency across approximately 500,000 square metres of office space in the last five years, including properties where its corporate tenancies are situated.

Further, the company has ramped up its net zero ambition by aligning its Scope 1, Scope 2 and Scope 3 emissions reduction target with the Science Based Targets initiative (SBTi).

Unibail-Rodamco-Westfield, France

Since 2007, Unibail-Rodamco-Westfield (URW) has had a bold CSR strategy focused on sustainability – minimizing the ecological footprint of its activities while increasing property values. The property group received a Negligible Risk ESG Rating of 4.7, which earned it the number 2 rank out of 1058 real estate companies in this year’s sustainability scores by Sustainalytics.

Between 2006 and 2015, the group reduced energy intensity per employee by 33.8 percent and carbon intensity by 65.1%. URW is advancing its CSR strategy and has established new long-term goals as part of its “Better Places 2030” program. One of the core commitments of this program is to reduce its carbon footprint by 50% from 2015-2030. Some of its other initiatives include:
- Improving the energy efficiency of assets by 30% by 2030
- 100% of assets to include a climate change risk plan by 2022
CBRE Group, Inc., United States

CBRE Group, Inc. secured an ESG score of 79 in S&P Global’s ESG Scores for 2023. The group is also ranked No. 17 on Sustainalytics’ ESG Risk Ratings out of 1058 real estate companies with a Negligible ESG Risk of 7.6. In the Top 50 Best ESG Companies by Investor’s Business Daily (IBD), CBRE is #23 and the only commercial real estate services firm on the list.

CBRE Group has signed The Climate Pledge as part of its 2040 net-zero emissions plan, committing to achieve net-zero carbon 10 years ahead of the Paris Agreement objective. This commitment includes carbon emissions from the company’s core activities and buildings managed for investors and occupiers, as well as indirect supply chain emissions.

CBRE listed and benchmarked 5,941 buildings in the ENERGY STAR programme in 2021, totaling more than 346.9 million square feet. Thirty-six CBRE-managed facilities in the United States increased their ENERGY STAR rating by at least 10%, resulting in a total decrease of 23,233 metric tonnes in GHG emissions.

This year, the company also joined the Business Ambition for 1.5°C, which is being driven by the SBTi in collaboration with the UN Global Compact and the We Mean Business alliance.

Jones Lang LaSalle Inc. (JLL Inc.), United States

S&P Global granted JLL Inc. a strong ESG score of 72 for the year 2023. The real estate services firm also ranked 7th out of 1058 companies with the lowest ESG risk, securing a 6.7 Negligible Risk Rating by Sustainalytics.

By signing The Climate Pledge to achieve net-zero emissions by 2040, JLL has shown the pathway for real estate to accomplish sector-and-economy-wide sustainability goals. To meet the promise, the company will fully abate 95% of its 2018 baseline greenhouse gas emissions. In addition, JLL has set an aggressive science-based target that covers Scope 1, 2 & 3 emissions from over 380 offices in 40 countries around the world. The real estate services company also joined the WGBC’s Net Zero Carbon Buildings Commitment, which strengthens its existing goals and reinforces its ESG leadership in the built environment.

DLF Limited, India

With an overall ESG score of 75, DLF Ltd. is the only Indian real estate company to be recognized globally for its ESG performance and included in the Dow Jones Sustainability Index. The company has also been named S&P Global Industry Mover in the real estate category for the year 2020-21.

DLF is driving ESG leadership in India’s built environment by linking its initiatives with the most relevant SDGs, and working on KPIs to track progress towards them. DLF has significantly reduced energy consumption through measures such as use of energy efficient lighting and equipment, and management of HVAC systems, etc.

Following are some of the sustainable facilities management initiatives taken by DLF in its existing buildings:

Using FY 2019-20 as a baseline, reducing energy intensity in their rental assets by 15% by 2030.

Using FY 2019-20 as a baseline, reducing water intensity in rental properties by 10% by 2025.

By 2030, DLF plans to have at least 90% of its overall rental portfolio certified as green and in compliance with all regulatory standards.

MITIE Group PLC, United Kingdom

Mitie Group has been conferred a Low ESG Risk Rating of 12.5 by Sustainalytics, which places it among the leading ESG companies in the world. Mitie’s Social Value Report for 2022 shows that the UK facilities management company is well on course to reach zero operational emissions by 2025, 25 years ahead of global net zero commitments.

Mitie emitted 23,661 tonnes of carbon in FY22, less than their aim of 25,230 tonnes. The company launched a Plan Zero initiative that lays down the roadmap for decarbonizing all its sites across the UK, with nine sites becoming net zero in 2022 itself. An additional 8 sites are planned to be decarbonised by next year. Mitie has also committed to initiatives such as LED lighting, insulation, modernising obsolete equipment, and asset management, which will save 26 tonnes of CO2 each year.

Cushman & Wakefield PLC, United Kingdom

As a global real estate services provider, Cushman & Wakefield has planned to achieve net zero emissions in its own properties all over the world as well as those of its clients by 2050. In 2020, the company offered energy and sustainability services for 370 million sq ft of space in the United States alone, according to its CSR Report.

Cushman & Wakefield emitted 18,827,178 metric tons of carbon dioxide equivalent scope 1, scope 2, and scope 3 GHG emissions through its operations in 2020. In comparison to 2019, this implies a 2.5 percent reduction in overall emissions.

Cushman & Wakefield GHG Emissions 2019-20

To further boost its ESG leadership, the company has committed to a 50% reduction in scopes 1 and 2 GHG emissions — by 2030 from a 2019 base year, a target which has also been endorsed by The Science Based Targets initiative (SBTi).

Driving the Future of ESG in the Built Environment

Numerous studies have confirmed the benefits of implementing an ESG plan, indicating that buildings with a clear sustainability purpose will see a higher return on investment. Setting specific and achievable ESG targets will aid in lowering operating costs and carbon emissions, as well as improving productivity and the overall performance of the facility. It is important for companies to have sustainable facility management solutions.

ESG initiatives should now be a main focus for Facilities, Real Estate, and Property Managers who want to stay ahead of the game. This will allow them to create KPIs and report on performance to stakeholders, as well as ensure that their buildings are appealing to both investors and occupiers.

If you enjoyed reading this article and want to take action, we want to hear from you! Get in touch with us.
May 19, 2023
The Ultimate Guide to Becoming a Great Facilities Manager
The facility management discipline is growing more dynamic and cost-conscious by the day, and facilities managers need to master a few essentials to be on top of the game. A facility manager’s responsibilities are typically vast and varied, ranging from providing exceptional customer service to ensuring that the entire building is in good working condition. If you’re thinking about improving your role as facility manager, this article addresses five important areas that you should be focusing on and offers cost cutting tips to steer your career towards success.

Let’s get started!

Five important things to focus on to become a great facilities manager

Just like with any job, the most valuable and exceptional employees are the ones who not only fulfill their individual responsibilities on time, but also work towards making the company as a whole more successful. Here are five ways facility managers can improve their performance while helping their company grow:
1. Aligning your work with organizational goals and values
For facility managers, having a strong grasp of the organization’s goals and values helps to perform all their responsibilities with greater drive and passion. Aligning facility efforts with big picture stuff involves recognizing the best interests of not only the top level management, but also people working at various levels throughout the organization. From minimizing operational expenses to ensuring a safe and productive environment for work, there are a number of ways facility managers should be reflecting the company culture in their maintenance and workspace management programs.
1. Understanding contract requirements and laws that affect the facility
One of the first things for facility managers to focus on is understanding the contract requirements, starting with the service level agreement (SLA). Facility managers must pay special attention to the contract’s scope of services and take note of any consequences for non-performance or violations. They’ll need to know the service delivery standards, as well as the key performance indicators (KPIs) that must be met and how performance will be monitored.

It is also important to conduct a facility condition assessment (FCA) to check the current state of the physical structure(s) and the performance of various systems. In addition, facility managers must have in-depth knowledge of the local, state and national laws and regulations that affect facility operations and maintenance processes.These can range from building restrictions, local zoning laws, security codes regarding occupancy levels, and fire safety measures, to maintenance standards and renovation rules among others.
1. Practicing Sustainability
While getting the job done is extremely important, it’s even more rewarding to get it done in ‘sustainable’ fashion! Companies are looking for sustainable alternatives to current ways of functioning of assets and procedures in their buildings due to the escalating environmental crisis. When it comes to job applications, more than 70% of people choose to work for a green company over a non-green one.

A large portion of the responsibility to bring about this green shift falls on the facility manager. They’re expected to minimize the company’s environmental impact by cutting down consumption and waste of resources and lowering emissions through energy efficiency, optimization of asset performance, running conservation programs, etc.
1. Identifying avenues to implement the latest trends and technologies in facilities management
Until very recently, facility management has been a practice without much innovation. Given that technology has an impact on not only how we work but also where we work, facility managers must develop methods to respond proactively to emerging workplace concepts such as virtual workplaces, shared workspaces, home offices, and so on.

Facility managers who want to excel keep up with the latest technological trends and software tools in the market which can be employed in their facilities. And they also set an example as leaders by having a thorough understanding of all these innovations, so they can effectively train members of their staff.

This brings us to perhaps the most important role that a facility manager should focus on…
1. People management, communication and team leadership
Facility management is all about creating happier and healthier spaces, conducive for meaningful work and interactions between people. A facility manager’s job is about understanding and addressing the needs of all the employees, as well as the various stakeholders, end users and visitors, instead of just making the property look good on paper. It’s also imperative for them to show a strong sense of compassion and excellent managerial skills to coordinate with different departments on a daily basis.

Another crucial aspect of a facility manager’s job is leading their team by communicating effectively, assigning tasks based on each individual’s ability, and encouraging them to strive for growth in their career. Facility managers should take the time to conduct workforce upskilling programs to improve technical skill and environmental awareness and develop a forward-thinking mindset in the entire facilities department.

How can facility managers maintain the facility in top condition while keeping a firm grip on finances?

One of the most decisive responsibilities of a facility manager is to find cost-effective solutions to ensure that facilities run smoothly, without compromising on quality. Here are some best practices to help you cut costs and increase efficiency:
1. Follow a proactive maintenance plan
Top-notch facility managers know that the cost of fixing an asset at the last minute is significantly higher than the cost to maintain its continuous operation. Many maintenance teams are using proactive approaches like preventive maintenance, and a growing number are also utilizing some level of predictive maintenance. Depending on the criticality of equipment and available funding, the decision of which maintenance method to adopt will vary. However, every maintenance strategy’s return on investment improves when it’s proactive instead of reactive.
1. Deploy CapEx to reduce OpEx
Facility managers can wisely dedicate capital investments for equipment upgrades, staff training and asset management technology to lower the facility’s operating costs. Some examples include:
- Replacing aging assets with newer, more efficient ones before the end of asset lifespan
- Upgrading to more efficient models of chillers or boilers to reduce energy consumption
- Using asset management software to optimize asset performance, reduce maintenance costs
- Leveraging technology to automate, digitalize and control operations remotely
- Hiring maintenance experts or training in-house staff can help save time and money in the long run
1. Track and measure performance with data analytics
Thanks to sensors, IoT, and digital twin technology, facility managers can have complete visibility into all aspects of facility operations, helping them to establish key performance indicators (KPIs) and plan well for the future. Plus, with an asset performance analytics application, facility managers can make data-driven decisions that have shown to deliver a strong return on investment (ROI), ultimately improving the company’s overall bottom line.

Here’s a quick recap of all that we learnt in this article

Be a great facilities manager today!

Rather than reinventing the wheel, facility managers should simply focus on the fundamentals that have shown to bring consistent and lasting results. Practice the points we have mentioned in this guide to become a great facilities manager in no time!
February 22, 2022
ESG in the Built Environment:The Real Estate Industry’s Growing Importance
Climate change has made it plainly obvious how certain businesses have turned a blind eye towards the environment for years. Even after so many pledges and virtuous display of corporate social responsibility, very few trust business to do right by the planet and society. The gravity of global challenges and the impact of business on them have brought environmental, social and governance (ESG) issues under intense scrutiny by all stakeholders – from shareholders and employees to customers and people at large.

Today, a company’s operations and growth prospects are closely assessed in terms of its ESG performance, irrespective of sector and size. However, the real estate sector is of special focus to the ESG agenda. ESG practices in real estate were fundamentally born out of necessity. But the theme of such practices should slowly move away from merely preventing damage, towards creating a positive impact and delivering solutions.

Why ESG Should be Top of the List for the Real Estate Industry?

1. Real Estate’s Big Environmental Impact

We can safely say that investors’, customers’ and the general public’s heightened awareness on climate change in recent years is making ESG climb up the priority list for companies in just about every industry. And when you consider that buildings alone are responsible for a whopping 40% of the world’s carbon footprint, you already know where we need to pick up the most pieces!

The real estate industry, with its large-scale and complex system of assets for heating, cooling, lighting and other purposes, causes a significant amount of operational emissions and energy waste. Real estate establishments have a long lifespan and normally cannot be relocated, leaving them vulnerable to regional consequences of ESG risks such as stricter regulatory requirements, shifting preferences of society, and exposure to extreme weather events.

2. Global Commitments to a Net Zero Future

Commitments from governments and organisations around the world are increasing demand for the adoption of ESG initiatives by real estate companies.

World Green Building Council CEO Cristina Gamboa says

“We require a solution focused response to the urgent need to significantly reduce upfront emissions in buildings. We will accelerate action to achieve our goal of slashing embodied carbon by 40% by 2030 and securing net zero embodied carbon by 2050, in addition to our net zero operational carbon goals.”

The GlobalABC’s 2021 Global Status Report shows that real estate’s current efforts since COP21, will not be sufficient to achieve net-zero by 2050. Real estate even rose to its villainous status at the United Nations Climate Change Conference (COP26) in Glasgow earlier this year. There will be a special focus on the industry, as an entire day was set aside to address the huge implications of the built environment on climate change goals. Despite increases in energy efficiency, global building energy consumption and GHG emissions continue to rise and be locked in for decades.

Also, building floor area is nearly going to double by 2050. Newly designed buildings are certainly more efficient, but 70% of buildings that will exist in 2050 have already been built, so decarbonising our current stock is a top concern.

3. Greater Integration of ESG in Investment Decisions

In response to rising environmental challenges, commitments to net-zero targets, and evolving preferences of investors, real estate companies will undoubtedly have to make massive improvements in their ESG strategies.

Investment decisions are becoming increasingly dependent on ESG factors. In order to make informed decisions, investors require information on how real estate companies are performing on ESG issues, catering to customer demands and meeting legislation. Therefore, building owners, operators and occupants clearly face the material dangers of climate change and potential future costs of lagging behind in sustainability measures.

The same report mentioned in the figure above finds that 74% of investors in UK commercial property think the importance of ESG credentials will increase over the next 12 months.

What’s more, 81% believe it will become even more crucial over the next 3 years, highlighting how important real estate’s commitment to ESG is for investors.

But ESG in the real estate industry can be far more impactful. A report by Deloitte suggests that ESG integration among businesses and investors can serve as a key differentiator for real estate companies, improving reputation and as well as financial performance. The industry’s urgency for transformation presents an ideal opportunity for real estate to concentrate efforts on the “E” in ESG to drive long-term value creation for all stakeholders.

ESG as a Value Driver for Real Estate

Real estate companies that perform strongly on ESG metrics can attract tenants who are progressively looking for efficient, healthy and green certified buildings. Beyond this, ESG-oriented companies can increase profitability through higher property values, tenant retention and improved return on investment.

The gap between green rental premium and brown rental discount is widening. There exists substantial evidence that green buildings command higher rents over equivalent non-green buildings. This indicates strong signals for a “brown discount” on properties with comparatively weaker sustainability credentials.

According to the World Green Building Council, better decarbonisation systems in buildings result in increased marketability, and play a major role in preserving property value. Such mitigation measures in real estate properties have also been found to save money by optimising asset use, leading to cheaper long-term operations and maintenance costs.

It’s About Your Bottom Line

Studies and real world examples have proven over and over again that good environmental practice is excellent for business. When done right, ESG initiatives not only address sustainability, but can also contribute to cost savings, social equity, tenant and employee health and well-being.
- Sustainability has been linked to enhanced cash flow at the building level,
- There is a direct link between portfolio sustainability and stock market success,
- A link between sustainable buildings and greater profits for real estate investors. Returns are also starting to fall for companies that are reluctant or unable to disclose their ESG performance.
Leading real estate companies are proactively managing ESG-related issues, including climate resilience and the net-zero transition. However, there remains a considerable gap between global leaders and conventional businesses. Those who haven’t yet embraced ESG strategies must quickly get on track or they will risk falling behind. There is a crucial need for building analytics solutions to make buildings sustainable and smart.

If you enjoyed reading this article and want to take action, we want to hear from you! Get in touch via LinkedIn or send an email to chanchal chadha and we’ll be happy to talk.
December 21, 2021
COP26 Impact: Six ESG Mega Trends to Watch in 2022

The trends that set the tone for a more sophisticated ESG environment gathered steam at the Paris Agreement in 2015. Six years later, these trends further intensified and evolved at the 26th United Nations Climate Change Conference of the Parties (COP26), which provided clear direction for ESG-oriented action from governments, business leaders, and the financial industry. Those who have progressively embraced the ESG movement know that companies with strong corporate governance and good business practice are best-positioned for the future.

Down below are six ESG megatrends likely to feature prominently in the actions of companies, investors, and regulators in ways that will redefine the ESG landscape in 2022.

Six Esg Megatrends To Watch In 2022

1. Growing Multi-Sector Collaboration & Finance on ESG Issues

If 2021 taught us one thing, it was that global challenges require global collaboration. Fighting climate change is perhaps the biggest environmental challenge of our time. While governments have always been billed with this responsibility upfront, the good news following COP26 is that private sector players and capital owners have allied to contribute as well.

Apart from world leaders pledging to deliver on climate goals at COP26, more than 30% of the 2,000 largest publicly traded companies in the US have committed to going net-zero by 2050. Over 250 banks representing 40% of financial assets worldwide have joined the Principles for Responsible Banking movement, in which the banking community finances actions to build a socially just and sustainable world. Nearly 300 member companies work together in the Business for Social Responsibility coalition, and the world’s largest investors are joining Climate Action 100+.

Expect more public-private partnerships, collaborations between companies, investors, financial institutions, and industry coalitions to tackle environmental issues, mobilize climate finance, and set standards for responsible business.

2. A New Common Standard for ESG Disclosures

The announcement of the International Sustainability Standards Board (ISSB) at COP26 opens a new chapter in the field of ESG compliance and reporting. The ISSB, which will be formed as a merger of the Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB), likely by June 2022, is an important step towards a consistent reporting framework. The board will unite all different frameworks and build a common, global baseline of sustainability standards to better assess the ESG impact of businesses.

A new common standard like this means compliance with ESG regulation will become easier, and companies will be able to honour their roles in realizing the goals of COP26.

3. From Greenwashing to Integration of ESG Principles

The last 5 years have seen a remarkable rise in interest over ESG from investors, asset managers, and corporate boardrooms. That said, private companies and sustainable finance evangelists are being confronted with growing criticism over “greenwashing” as part of their CSR activities and investment portfolios. For a long time, ESG has been used as nothing more than a marketing tool to persuade the public into believing that a company’s products and operations are environmentally friendly.

COP26 presented a reality check for many business leaders and global organizations. With climate change becoming more visible by the day, we expect more and more stakeholders to understand how ESG principles can and should be integrated into investment decisions and corporate risk management. Further, companies that can better measure their ESG impacts and risks will be better equipped to make smarter capital allocation decisions.

Only companies that make the move away from check-the-box exercises to an outcome-driven approach to ESG operations will be able to successfully drive transformation.

4. The Role of the Built Environment Comes to the Fore

For the first time, at COP26, buildings received the attention of governments and policymakers as they looked to remove this huge barrier to a net-zero world, in a session dedicated to cities, regions, and the built environment. The attention was long overdue.

Buildings use about 50% of extracted materials and produce 40% of annual global carbon emissions. And the total building floor area around the world is expected to double by 2060. All countries are rapidly urbanizing, and we need to check the environmental impact of buildings across their lifespan – their operational emissions from heating, cooling, and lighting as well as embodied emissions involving the production and transport of materials used in construction.

The role of the built environment will certainly take centre stage in the quest for reversing climate change and will form a crucial part of ESG considerations for companies. ESG also prioritizes the well-being of occupants, tenants, and employees within the building. This means that good air quality and safety measures are going to be extremely important for ESG-oriented real estate companies. Thankfully, technologies already exist that can help drive down emissions and make the built environment a safer and more sustainable place to live, eat, play and work.

This brings us to our next ESG megatrend…

5. Data and Technology Will Drive Smart ESG Practices

Data and digital technologies grabbed global recognition as ways to speed up climate mitigation and adaptation at the Glasgow Climate Summit. As Commissioner Thierry Breton said in his speech on the green digital transition at the EU Pavillion side event of COP26 – “Connectivity enabled by digital technologies carries the enormous power of cutting global carbon emissions. 5G, Internet of Things, Artificial Intelligence, digital twins, blockchain, satellite technologies, and so many others can help to reduce them by 15% by 2030!”

Data and technology will enhance the ability to implement and measure ESG related practices and assess their impact on long-term value creation. Better visibility and access to information like asset maintenance schedules and resource consumption will play a major role in linking financial performance to ESG indicators.

For example, digital twins allow operators to look at real-time data across a building’s entire assets including HVAC, security, and occupancy systems, which can then be used to cut down costs, optimize resources and reduce greenhouse emissions.

6. The Rise of the CSO: Increased Focus on Metrics & Executive Compensation

Another ESG trend that will continue to grow into 2022, is the dramatic increase in the position of Chief Sustainability Officer (CSO) at companies around the world. According to CSO recruitment firm Weinreb Group’s latest report, of the total 95 CSOs hired in publicly traded US companies since 2007, 43 have been hired in 2020 and 2021 alone. McDonald’s, Walmart, HP, Aramark, FedEx, Morgan Stanley – they all have one.

As companies focus on ESG related metrics, a greater proportion of executive compensation is also becoming performance-based instead of time-based. Even though ESG linked executive compensation can turn into a topic of contention among investors and shareholders, the role of the CSO is expanding and changing. This includes the leap beyond the ‘E’ in ESG to include social justice, diversity, and inclusion at the workplace. Chief Sustainability Officer, Head of Sustainability, Head ESG Officer – we’re expecting more of them in 2022!

Seizing the ESG Moment

If 2020 was the year of awareness and 2021 the year of commitments, 2022 is going to be the year of action. As the foundations are being laid for the trends highlighted above, you can expect to see the extensive implementation of sustainable practices and meaningful collaborations on environmental, social, and governance issues. Energy management for asset maintenance is also becoming the center of sustinable practices.

Stakeholders who fail to seize the ESG moment will likely suffer greater risks and lose out on crucial opportunities compared to ESG leaders in several key areas, ranging from easier access to finance to improved business performance and exploring new business projects.

What are your thoughts on the ESG trends we’re going to see in 2022? How are you preparing to embrace ESG as part of your business strategy? Let us know!

December 14, 2021
Takeaways from Deloitte’s commercial real estate outlook for 2021 and beyond
Stepping into the last quarter of 2021, the global economy appears to be picking up pace and faring better than many expected. The commercial real estate industry, which has undergone huge changes during the pandemic, became witness to trends such as remote work, digitalization and cloud applications.

In its CRE Outlook for the year, Deloitte investigated the effects of COVID-19 on some of the fundamental functions impacting the CRE industry, and underlined how overcoming these challenges could lead the way for new opportunities to build back stronger.

We bring you our key takeaways from these functional challenges facing the commercial real estate industry – technology, operations, and talent – and how CRE companies can position themselves for growth in the coming years. Let’s get straight into it!

Technology

COVID-19 accelerated and necessitated the use of technology in the CRE industry. Digital transformation and tenant experience are coming to the fore as main objectives amid the pandemic.

Challenge:

Even though digital technology has helped improve tenant experience, fast-track important tasks and ensure business continuity, CRE companies still struggle with defining digital workflows and digitizing key business processes. According to the report, 56% of the respondents believe the pandemic exposed frailties in their company’s digital capabilities and impeded their plans to transform.

So what can CRE companies do to address their digital transformation hiccups?

Opportunities:

By making digital transformation a priority, CRE companies can tap into a sea of benefits – like happier tenants and advanced business performance. Industry leaders suggest that developing a structured plan with a more proactive approach, including the uptake of various technologies and data analytics, would likely bear substantial results.
- Using IoT-enabled smart devices
Companies can significantly improve tenant experience by optimizing real-time updates about facilities and developing a sense of community using IoT-enabled smart devices and mobile applications.
- Leveraging Cloud Tech
Cloud technology could be the cornerstone for a wide range of functionalities as it offers scalability, data storage, and universal access. Some CRE companies have already ramped up their use of cloud-based collaboration and productivity tools like Realstax and Bixby to lower in-house technology costs and increase flexibility.
- Building Partnerships with Tech providers or Proptechs
REIT (Real Estate Investment Trust) respondents have put a foot forward in this direction, showing more willingness to collaborate with proptechs. On an average, 58% of REIT respondents showed increased intent to partner, compared to 45% of respondents who are developers.

Operations

Cost management and redefining the value proposition of properties became primary goals for the CRE industry during the pandemic. Optimizing the operations function is considered to be essential for companies to build resilience against the volatile business environment.

Challenge:

As demand for leased space reduced significantly, CRE companies faced rising pressures to contain costs. Companies are also incurring higher operating costs because of the additional health and safety measures they need to implement across their portfolio of properties.

Opportunities:

To position themselves for longer-term success, companies should consider the following actions. These are crucial to enhancing business resilience and cutting down costs.
- Streamlining and Restructuring Operations
This involves an in-depth analysis of business processes, identifying opportunities to restructure and reduce inefficiencies which will allow work to get done faster and more cost-effectively.
- Automating or Outsourcing Non-core Operations
For CRE firms, non-core operations may be data collection & processing, maintenance, security, supply chain management, and so on. These should be automated and/or outsourced to gain operational efficiency. The pertinent dilemma – to build or to buy, must be taken care of.
- Deploying Smart building Design and Asset Management Systems
Companies could increase the value of their properties by deploying smart building design and modernizing asset performance management capabilities to render more relevant services to tenants and end users. This may involve using sensor technologies and predictive analytics to monitor facilities remotely and offer reliability-centered maintenance, implement more rigorous cleaning procedures, monitor HVAC systems, and enable data-driven decision making.

Talent

The shift to remote working was unprecedented for the CRE industry. Companies had to provide the infrastructure for employees to work effectively from home, or anywhere for that matter, while prioritizing health and safety.

Challenge:

The pandemic escalated many organizations’ need to reimagine job roles, leadership strategy, talent systems and processes, and culture to attract and retain a skilled and dynamic workforce.

Opportunities:

Some key avenues for CRE companies to improve upon and champion positive change in their workforce ecosystem
- Creating an enabling culture
Companies should adopt an enabling work culture and use the workplace to make employees feel valued, build strong relations, facilitate collaboration, and create more human experiences.
- Talent Transformation
Planning and implementing a talent transformation to adapt to the future of work, and prioritizing diversity and inclusion will provide a competitive edge.
- Three Approaches to the Way People Work
CRE companies could consider three approaches to the way work is done in the future.

Based on these approaches, companies could be progressives, visionaries, or simply traditionalists. The nature of work in the three types of companies is summed up well by the image that follows!

Conclusion

To state the obvious, the pandemic has altered the way we live and work, and it’s been no different for the CRE industry. It has pushed leaders across the globe to rethink their business strategies and goals, forced companies to prioritize cost containment, and amplified the scope of rewards from digital transformation. At the same time, human connection is becoming more relevant than ever, as in-person interactions have reduced significantly in the last year and a half.

From here on out, CRE companies are expected to master a balancing act – ensure business recovery, seize new opportunities, cultivate a cohesive workforce and improve tenant experience. This will require proactive leadership and organizational agility, and increased levels of collaboration among various stakeholders, to be able to adapt and thrive in the future of commercial real estate.

What strategies have you applied to sustain and thrive in the CRE industry this year? Let us know your experience with technology, operations, and talent, and how you are preparing to overcome the challenges posed by the current commercial real estate scenario.
October 11, 2021
#CREate FM 25 Talks with CRE Changemakers | Episode 5

#CREate FM 25 Talks is an interview series with CRE change-makers and Doers. With this, we intend to bring out first-hand experiences and best practices on digital transformation, energy management, and sustainability initiatives from industry leaders.

In conversation with Gopalakrishnan G,

Having the correct set of solutions with a proven track record of providing a client’s facility is crucial, whether the objective is to preserve the Fundamentals of FM services in a retrofit or to adapt the pace of technology for improved service delivery. In this edition of the FM Times #CREate FM 25 interview, Emrill’s Gopalkrishnan describes how to make the most of cost-efficient solutions and technology implementations.

Q.1 Can you just brief us about your background, a little bit of what you are doing currently?

Gopal: I am a Civil engineer and MBA holder. When I started my career, I became a certified member of IWFM and joined Emrill around 18 years ago in 2003. Now I lead as an operational director and report directly to the CEO.

At Emrill we have staff from more than 16 nationalities working with us, that’s why their health and safety is always on priority for us. For the same reason, we have established a Safety Action Group (SAG group) under which we make sure that all the safety requirements are put in place. We consistently and constantly focus on team management and other activities such as statutory and legal requirements are maintained and achieved without any deviation.

We have also introduced a behavior-based safety program through which we detect any unsafe behavioral traits of our staff and try to eliminate them by providing additional safety training to them. According to Heinrich’s principle, every unsafe behavior can lead to a major incident. Hence we want to eliminate the build-up of any such behavior.

To reduce the communication gap between the supervisor and manager we introduced the Step-up program in 2016. With this capacity-building program, we tried to help the supervisor grow intellectually and knowledge-wise with the company. This has helped us to improve the retention rate and foster a better working environment. After all, at facilities, we are not talking to machines but the people hence our staff are our biggest assets and we invest in their training and growth. It was the same reason behind the starting of the Graduate engineer training program.

Q.2 You are one of those few who believe pandemic hasn’t really changed the fundamentals of FM services, rather it has just accelerated them. What makes you think so in terms of technology and service delivery?

Gopal: FM has not fundamentally changed but only the applications have evolved. The pace of technology adoption has increased. I can definitely say that. For Emrill as an organization, we have been driving this adoption of the relevant technology to improve service delivery. We have always been using cutting-edge technology, but more than that, we believe and value the opinions and suggestions of engineers and technicians, and other staff members.

We have implemented remote monitoring sensors for lighting and plumbing applications which we can track from our Command and control centers. So the pandemic has only increased the pace of implementation.

Q.3 What makes Emrill stand out from its competitors when it comes to O&M services? Use of specific applications or technology to manage or monitor assets, or unique strategies and practices?

Gopal: We never believe that one set of solutions fits everyone. We prefer going to the client to understand their needs, what is already there, what are the shortfalls, and then do the gap analysis to come up with solutions. So we will get everything approved by the client that we can customize the solution based on the client’s requirement.

We also believe in the speed of execution, in UAE there are three main sectors for FM contracts – the Commercial, retail, and aviation sector and most of the contracts last for 1-3 years. They want cost-efficient solutions and technology implementation as soon as possible. It is also not necessary that a piece of technology that is suitable for one sector should and must be implemented in another sector hence we never force the technology implementation rather we only support the client’s facility by providing relevant tech.

Q.4 In your opinion, what motivates you to launch or trial new technology applications or platforms? What percentage of that decision is determined by the client’s demand and your technology roadmap? What does Emrill’s tech roadmap look like?

Gopal: We have our own tech team which is the biggest advantage for us. But we also have different service providers working for us. For now, we are using FSI Go apart from the apps for improving technician’s efficiency. so we are using all these applications for different purposes. With the efficiency app, we get the dashboard to manage everything about housekeeping, etc while the Technician app gives us insight into technician’s productivity. Our IT team also provides integration capabilities so that we can work with any new client’s application or system without any problems.

Data is very important to bring visibility to operations and mobile applications are leading that way. Mobile applications are giving all the necessary data and insight on your hand and this is true for both the technician and facility manager.

Q5. In the UAE and MENA region, FM players have been very successful in capturing a large part of the market. There is fierce competition to win the next bid and even to retain the existing contract. What is it about Emrill that makes it more successful at winning contracts according to you?

Gopal: If I have to answer in four words then I would go with people, Training, Technology, and Integrated approach. To start with people, as I mentioned earlier we consider them as a real asset and hence we invest in their skills and make them ready to meet their next challenge.

We have a trainee engineer program that runs for 3 years to nurture world-class talent. We also have our own technology center where we constantly experiment with new applications that can be helpful to our clients. In some cases, when we don’t have the required tech available that the client is expecting, we honestly ask for some time and get back with the expert solution to them. This is what our client likes the most.

August 17, 2021
How the leadership of this UAE based FM firm is making all the difference

(This article is an honest attempt from the FM Times Editorial team to explore and share success stories across the facility management community for collective learning and improvement of all. If at all anything is misinterpreted by us or left to mention the source, please point it out and write back to us)

With the overwhelming response from our readers to our FM unlock blog post, we are even more excited to share this next post. In the last edition, we discuss some of the critical traits of success that have helped Eltizam stand out from the crowd and win key deals & partnerships in the last couple of years.

Our topic this time is an FM firm known for its strong leadership team, dedication to employees, and constant expansion. Just to give you an insight, amidst the pandemic, It has continued to focus on improving customer satisfaction, strengthening its brand identity, and investing in human capital by upskilling its team members.

You might have figured it out by now, yes it’s Imdaad LLC. This Dubai-based facility management company was established in 2007 and since then has been branching out into a variety of services ranging from cleaning to waste management, among others.

Diverse Portfolio:

FM firms rarely expand their service offerings beyond a certain scope; to their defense, most of them want to excel in particular areas, which is why they believe in vertical integration of services instead of horizontal integration.

It may make sense from a scalability and profitability standpoint, however, from an owner’s perspective, when it comes to outsourcing multiple tasks integrated FM providers become the obvious choice for better synchronization between the services and efficiency.

Imdaad offers a variety of service offerings under different brands which can later be combined to deliver an integrated experience. Imdaad provides Hard FM and Environmental Services alone while FARZ provides Materials Recovery Facilities, Isnaad specializes in Soft FM, Imtedaad provides Energy Audits and overall management, Vision Safety deals in Fire Safety, and Nigma is known for Automation.

Diversification and a focused approach have led Imdaad to win multiple awards in different fields. Recently, they were awarded company of the year for sanitation and waste management.

Technology:

Mahmood Rasheed, chief operating officer of Imdaad, believes the firms that adopt technologies such as IoT and automation will reap the benefits in the long run. Imdaad has ensured they don’t divert their focus from such technologically advanced solutions regardless of the circumstances.

As a result, Last year Imdaad launched a range of digital tools to improve customer convenience and operations efficiency. It includes a smartphone application that allows real-time tracking of operational data for optimal resource allocation. Technology team members strive to minimize asset downtime and improve response times to avoid disruptions.

In order to provide proactive solutions and reduce maintenance costs, Imdaad deploys building management systems, which provide real-time access to assets at their clients’ sites and enable remote monitoring in real-time.

The Imdaad team, which analyzed the data accumulated from our BMS over a month-long period, reported that 90% of the faults that arose were fixed remotely through using the technology. Highlighting the importance of such provision during these times of social distancing and hygiene protocols.

Leadership:

It has always been known that visionary leadership skills lead to success, and Imdaad’s CEO Jamal Abdulla Lootah has demonstrated this exceptional leadership ability over and over again.

Through continuous investment in new technologies and high-quality services, plus a strong commitment to environmental sustainability, Lootah is committed to keeping Imdaad ahead of its competitors. Imdaad launched Imtiaz Academy in the year 2019 with the goal of equipping its team members with the knowledge and skills they need to succeed.

The Imtiaz Academy aims to train more than 500 employees each year in ten BICSc skills, including housekeeping, safety in the workplace, using equipment, interacting with customers, and personal hygiene.

In one of his interviews, Lootah emphasized that “despite market conditions, we will not stop investing in people and technology and try to retain our customers.”. We are here to exceed client expectations and a lot of new things are on the horizon for sure.” that just showcases the dedication and strong resolve towards Imdaad’s employees

In addition to several new projects signed and nearly all the existing contracts renewed, Imdaad’s FMS division turned out more profitable than the previous year. The firm has also remained the preferred service provider for the nation’s largest banks as well as all major facility owners.

That was our research on one of the leading facility management firms in the United Arab Emirates. Do you think did is there anything we’ve overlooked? Please let us know in the comment section or write to us.

July 15, 2021
Takeaways from Top Surveys: Testing preparedness to Reopen workplaces

Are you familiar with John Driscoll’s Model of Reflection? Also known as the “What, so what, now what” strategy.

I’m sure you’ve heard of it recently. It is a reflective model for understanding problems and finding new solutions. It begins with the incident, leads to gathering information about the consequences, and later on leads to brainstorming ideas and a plan of action.

In light of reaching the halfway point for the year 2021, we thought this might be an appropriate time to introspect the situation with ‘what, so what, now what mindset’ and delve into one of the most frequently discussed yet incomprehensible topics in the CRE and facility management fraternity – How prepared are we and our buildings to reopen? (‘We’ represent all key stakeholders, including tenants, property owners, and facility managers.)

As a part of our research for this blog, we compiled surveys and study reports from leading think tanks, FM firms, and technology providers and analyzed them for distinctive trends and patterns. Some of the honorary mentions are Honeywell’s report – Rethinking buildings post-Covid 19 (June 2021), RICS UK FM Market Survey, Q2 2021, MRI’s Survey of Occupants and Landlords (March 2021)

Although most of the reports differed in their sample sets and survey methodologies, there were some similarities in responses and mindsets toward reopening offices. In this blog, we are highlighting those patterns to provide general consensus among CRE space.

Long-Lasting Impact:

Most of the measures taken as a first response to COVID will remain in place for longer than originally anticipated. Around 71% of respondents (facility managers) in Honeywell’s survey indicated that COVID had made them rethink their O&M practices, and among all the measures taken, air quality upgrades and safety protocols will permanently remain. As FM teams strive to achieve multiple goals, smart building solutions will be seen as a high potential for investment.

In terms of safety measures, Indoor Air quality has become a priority across the globe. 55% of respondents have ranked optimized IAQ as the most important aspect of a healthy building. Intriguingly, that mandate also shows up in investment patterns in technology. As per RICS’s survey, investments in health and well-being have seen the highest growth in the past 12 months besides energy management.

The pace of Digital Transformation:

Most FM teams are drafting their digital strategy, and COVID has given them the much-needed impetus to accelerate their efforts. The use cases that made theoretical sense before the lockdown are now being implemented on a large scale. A change in direction was driven by customer expectations, competition, and the feasibility of operations.

Honeywell’s survey suggests that ninety-four percent of respondents agree that remote facility management has become more important. More than two-thirds of them are interested in investing in smart buildings to drive efficiency and sustainability, as well as technology such as machine learning and artificial intelligence.

There is a high demand for solutions aimed at helping facilities managers remain operational. Research by Resonai forecasts that smart maintenance and repair applications that can help reduce downtime will be adopted at the highest rate (45%) of any new technology.

Expectations Vs Reality:

In spite of the majority of respondents believing in the benefits of new technologies as well as wanting to invest in them, the ground reality is slightly different.

While 93% of respondents agreed that improved air quality is important to occupants and stakeholders, only 37% have air quality management systems in place. The same study found that although 90% of surveyed facility managers think contactless building entry is important, only 35% of them currently implement it.

The DMA group found that 68 percent of facilities management professionals felt confident in knowing how smart technology could save money, time, and improve service delivery quality; however, only 27 percent said their organization’s FM/property teams are unlocking the full potential of smart technology for business process automation.

According to us, the risk appetite is among the reasons they are not following their instinct. It is important to understand that while digital technologies provide lucrative opportunities, the FM teams are working with very small margins of error. They have already digested significant losses due to contract restructuring and these extended lockdowns are only making things difficult for them.

However, this could be an opportunity for technology players to test their applications with low-cost subscription models. They can work under the shared risk principle with the FM team and after successful demonstration charge the full fee.

Customer experience and relation-building:

MRI’s survey revealed that 77% of respondents indicated that contact with tenants and landlords has improved greatly since the pandemic. FM teams can now better handle compliments and suggestions thanks to the switch from email to chat on workplace management applications, which allows turnaround times to be cut dramatically.

Ashok Mathew, senior manager at Ejadah, shared a similar experience during our #CREate talks with CRE changemakers. According to him, covid gave them the opportunity to work closely with developers’ decision-making teams, which helped them understand nuances of the service delivery mechanisms and win six Customer Centricity World Series awards for 2021.

In addition to a change in communication mediums, initiatives like Net Zero have opened up many doors for FM teams to engage with clients’ strategic teams and create new revenue opportunities.

Do you have experience with any of the above 4 trends? Did you learn anything from this experience, and did it assist your team in reassessing the situation and planning a safe reopening? Please share your thoughts with us at [email protected]

June 30, 2021