Archive for the ‘Facility Management’ Category

CRE Function Undergoing Major Transformation In China

Thursday, July 26th, 2012

The corporate real estate (CRE) function in China is undergoing a major transformation as illustrated in our latest Corporate Research report, The Dragon is Stirring – China Corporate Real Estate Survey 2012. One of the key findings is that global and Chinese companies’ outsourcing practices are converging in most areas. As perceived barriers to outsourcing (primarily concerns over employment levels and loss of control) are waning, a majority of Chinese companies will deliver CRE services via a mix of in-house and outsourcing three years from now. A fringe of listed and private companies is even considering fully outsourced delivery.

But the propensity to outsource is unevenly distributed depending on the type of CRE services. In line with the trends observed globally, property management is most likely to be fully outsourced today in China. More surprising was the level to which energy and sustainability services (ESS) is currently outsourced. Although an area often lacking a substantial level of in-house expertise, ESS is obviously already an important consideration for Chinese companies. Beside large stride progress on corporate responsibility issues and expected cost savings on energy, ESS plays a key role in attracting and retaining high calibre employees. Gaining ground in the acute war for talent that companies in Chinese major cities are experiencing involves demonstrating the sincerity of their corporate ethical values, and a green workplace is one of the ways to achieve that.

Figure 1: Which elements of your CRE function does your company outsource today?

Three years from now, a double digit percentage of Chinese companies is likely to outsource to a higher degree the delivery of a number of CRE functions. They are, in this order:

  • - Portfolio and facilities management
  • - Project management; design and build-out or fit-out; development services
  • - Transaction services
  • - Property management

Portfolio strategy and transaction services are more likely to remain undertaken in-house.

As our survey respondents indicated, the pressure of maintaining high-levels of growth coupled with heightened cost control are likely to be major drivers of increased outsourcing over the next few years. Intensified competition and amplified industry consolidation are also likely to force companies to place greater focus on their core business and to outsource non-core functions.

The survey findings are meaningful for service partners. While respondents have indicated a greater willingness to outsource, their preference goes for a hybrid, more fluid outsourcing model. This highlights the importance to invest time and effort in getting to know the unique needs and characteristics of Chinese companies’ portfolios. It also reveals a latent demand for greater flexibility in designing bespoke solutions.

Key takeaways for Chinese companies’ CRE executives are multiple. As they move along the outsourcing curve and adopt more mature positions, they might consider relationships that share goals, risks and rewards in order to achieve a true alignment of interests. They will benefit from being very clear on what they need from their service partner, both now and in the future, and in undertaking a thorough review of what the market can offer.

About the author
Anne Thoraval is the Head of Corporate Research for Jones Lang LaSalle in APAC, based in Singapore.

Posted in Asia Pacific, China, Corporate Real Estate, Facility Management | No Comments »

In Disaster-prone Asia Pacific, Preparation Is Key

Friday, March 23rd, 2012

“The Wise Rabbit sat under a tree and pondered about life in general. ‘The world is full of difficulties and dangers. First, there are natural catastrophes such as earthquakes and landslides and storms. Second, there is always the danger of famine, of shortage of food and water. Third, there is the danger of thieves and robbers.’ He then remembered an important appointment and went away.” – Maung Htin Aung, Burmese folktales, 1948

APAC has endured extensive natural disasters historically, and those in recent years have devastated surrounding communities, severely impacted companies’ operations and negatively affected national GDPs.

Drawing on the collective experience of 200 Jones Lang LaSalle client sites affected in Christchurch, Brisbane, Queensland, Japan and Thailand in 2011, Surviving the Disaster Zone: Lessons Learned in Asia Pacific explores what has worked well in preparation for and during a crisis. The author, Rob Timmermans, highlights the best practice during each phase of an incident:

  • • Preparation. When a hazard warning is issued in advance, convene a crisis management team and consider what can be done to minimise the impact, for example taping up windows, sandbagging or ordering portable generators. Involve service providers early to ensure critical resources are on standby when needed.
  • • Event. During the down time when all preparations have been made and yet people are not able to commence recovery efforts, focus should be on people’s safety and managing the physical and psychological impacts on staff. Appoint a single point of contact for staff and provide timely updates using all available communications channels (including social media).
  • • Recovery. In the aftermath of the event, the priority is to ensure facilities are safe and/or to identify short-term alternative space. Nominate the corporate real estate team as the ‘authority’ in declaring a facility safe to occupy following a disaster.

Beyond these tactical learnings, it is critical to have strong business continuity plans (BCPs) in place. Rob advises to:

  • • Incorporate standard management practices into the plans as employees will be far better equipped to make swift and relevant decisions if they are in line with their day-to-day responsibilities.
  • • Look beyond traditional stand-alone BCPs and integrate off-site options such as the ability for staff to effectively work from their homes using broadband technology, allowing many functions to be executed without interruption.
  • • Opt for geography-specific approaches for back-up sites. Natural disasters have an impact will beyond the immediate surroundings so it is important to consider inter-state or offshore location options for back-up operations.
  • • Schedule BCP trials when some key members of the crisis team are not available, as will most likely be the case when a crisis hits. This will demonstrate wether the support network is capable or flawed.
  • • Build pre-emptive BCP relationships between CRE teams and service partners or between landlords and tenants, to streamline negotiations and deployment of resources during time-critical periods.

Fortunately, unlike the not-so-wise rabbit in my introduction, firms across the region are now proactively reviewing BCPs, a task no longer seen as a mere box-ticking exercise.

About the author
Anne Thoraval is the Head of Corporate Research for Jones Lang LaSalle in APAC, based in Singapore.

Posted in Asia Pacific, Australia, Corporate Real Estate, Facility Management, Japan, New Zealand, Thailand | 1 Comment »

Smart Ideas for Eco-efficient Facilities

Wednesday, August 3rd, 2011

Recently I had an opportunity to visit the Microsoft Campus in Hyderabad. I was really excited and curious to visit a company’s campus which has a 3R sustainability policy (reduce, reuse and recycle). As I walked into the well maintained campus, a thought crossed my mind: I wanted to know how they implement the 3R policy and whether it was cost effective.

As Jones Lang LaSalle manages the entire Microsoft campus, I met the facility managers. I was really pleased to know that from landscaping to waste management in the building, sustainability policies are followed. Moreover, facility managers definitely can’t go high on spending as this affects their margins. So they have to implement green ideas in a cost effective way. Facility managers at the Microsoft campus were actually successful, to a large extent, in implementing the 3R policy in a cost effective way through “simple ideas”.

Yes, the ideas were actually very simple yet eco-friendly. Let me share a few instances where simple ideas made big changes. For example, facility managers de-weeded a lake within the Microsoft campus by using a species of fish which feeds on water weeds. They were successful in clearing the lake without affecting the ecosystem of the lake. In another instance, the boundary wall of the campus was to be moved to widen a road under instructions from the Government authorities. Facility managers managed to save and replant about 98% of the plants and trees that were landscaped around the boundary wall of the campus.

In addition, facility managers were also successful in reducing energy usage in the buildings. As the facility managers detected that there was energy wastage due to the air conditioning in partially occupied spaces, they introduced a VAV (Variable Air Volume Controllers) in the HVAC (Heating, Ventilating and Air Conditioning System) which is space-, location- and occupancy-specific. This resulted in an 18% reduction in energy usage by the HVAC. The lighting system was also retrofitted with LED lamps to reduce energy usage for lighting by about 50%. These ideas were not only eco-friendly but also very cost efficient.

Similar ideas to manage commercial facilities so that there is energy efficiency and conservation of the environment are being implemented in other corporate facilities such as IBM, Computer Associates and Accenture etc. It was a really good experience to know that these facility managers are actually making the triple bottom line (people, planet and profit) happen through simple but important changes in their approaches to managing facilities. Napoleon Hill, quite rightly, said that “Ideas are beginning points of all fortunes.” Simple ideas can really give smart approaches towards sustainability in managing commercial facilities. These can bring stark changes in saving energy and the environment which can be converted to tangible and intangible benefits.

About the author
Trivita Roy is the Manager of Research and Real Estate Intelligence Service, for Jones Lang LaSalle in India, based in Hyderabad.

Posted in Facility Management, India, Sustainability | No Comments »