Having been instructed on a large number of both London and regional multi-let offices over the past year, we have noticed a growing trend. Many asset managers and property managers are increasingly overstretched, which in turn is leading to poorly performing sites. These acquisitions should be creating opportunity. But, without a clear understanding of the key performance indicators and whether they benefit both landlord and tenant, opportunities are being missed.
How can we tackle the issue? The answer may lie with our managing agents and property managers themselves.
Know your stakeholders
Landlords are no longer providing boxes for tenants to operate from, but rather destinations that people enjoy working in. Understanding core occupier needs, as well as the limitations of each building and its systems, are therefore increasingly key. Many property managers rely on facilities managers to visit sites and meet tenant, however they should visit sites regularly to see this first-hand. Being seen and trusted also means property managers are more likely to be able to assist overstretched asset managers and deliver well-performing sites. Spending more time getting to know the building and its occupiers will help to lay out effective goals relevant to all stakeholders at the outset.
Invest in monitoring systems
It’s simple yet effective. Occupiers (and their staff) are quite rightly becoming more interested in the environment and, with EPC grading likely to become more stringent, monitoring buildings’ performance is critical.
The key to this is data, particularly regarding the use of electricity, gas, water and refuse. Most property managers will be aware of building management systems (BMS), which readily provide such data, but how often does your property manager analyse this data properly? It is common to find a BMS system working incorrectly – allowing plant and machinery to operate 24/7, for example – and the cure may be something as simple as reprogramming the BMS or fixing wires mistakenly cut during fit-outs.
Where the BMS does not record sufficient data, the use of data loggers can be a cost-effective way to record temperatures, co2, humidity, noise and other aspects that affect the working atmosphere and promote wellbeing amongst staff. It’s about the simple harnessing of data and then applying it to serve occupier needs.
On data of a different kind, building wide wayleaves and exchange to floor backbone fibre will also make it easier for occupiers to change suppliers and move in.
Building specific audits of lighting and plant can identify opportunities to further reduce consumption. Many leases do not allow the service charge to recover costs unless they are either a like for like replacement or beyond economic repair. A proactive approach of presenting occupiers with the cost and anticipated future savings can often lead to a building wide strategy being agreed, which delivers returns for all without being handicapped by the leases.
But after audit, are costs recharged appropriately? Doing so brings confidence and reduced voids, and yet there continues to be a prevalence of vendor’s agents who cannot provide a trial balance on the service charge, or demonstrate that the service charge or recharges are accurate. This can very often lead to the loss of tenants through a lack of confidence in the agent, and by extension the property and the landlord.
Prepare for occupier trends
It’s well-known that numerous pieces of legislation are strongly pushing buildings towards being more environmentally friendly. In addition to EPC changes, items such as refrigerants used in cooling plant and waste have further changes coming this year and there is also a growing demand for corporate social responsibility (CSR). As we all become more environmentally conscious, having a plan for the building and how its services are procured, and being able to share this information alongside health and safety considerations with occupiers to support their own CSR, will become increasingly important. Systems such as OSP and Elogbooks help with this immensely; but only if property managers and facilities managers use them efficiently.
Think outside the box
Finally, consider your building’s front of house. Many managing agents seem to see this as an opportunity to market themselves rather than provide a service. In many larger sites, the front of house provides a whole range of services, like yoga classes, laundry services and food delivery, so why not mirror this in smaller sites? When asset managers reposition a building and consider place making, the services and staff that come with a building should be used to show it off; this will surely make it more marketable to its intended audience and ‘better performing’ in the long-run. Treat a building as a destination in its own right.