VIEWPOINT

VIEWPOINT Property management is driving value beyond cost savings

Stephen McNabb

Head of Research, Australia

ABSTRACT

AUGUST 2016 CBRE Research

Danny Lee

Senior Research Manager, Australia

VIEWPOINT

[CBRE Pty Ltd| 3

ORGANISING PROPERTY MANAGEMENT:

INITIAL FOCUS ON COSTS TO DRIVE VALUE THROUGH OUTSOURCING

Source: CBRE Asset Services, May 2016

AUGUST CBRE Research

Insourced Environment Outsourced Environment

TRANSACTIONAL

Asset strategy

and value add

Reporting and

analytics

Lease administration

Property accounting

Facilities management

Asset strategy and value add

Reporting and analytics

Lease administration

Property

accounting

FM

TRANSFORMATIONAL

FIGURE 1: PROPERTY OWNERS TIME ALLOCATION FOR INSOURCED V

OUTSOURCED MODELS FOR PROPERTY SERVICES

Property management is driving value beyond cost savings

VIEWPOINT

Source: Presentation from The CBRE Institute 2016; Spheres of Influence - Mastering Change To Shape New Opportunities

Source: Challenging REIT Property Management Orthodoxy, CBRE

[CBRE Pty Ltd| 4AUGUST 2016 CBRE Research

FIGURE 3 – INCOME AND INCOME PER EMPLOYEE GROWTH ARE HIGHER

FOR FIRMS WHO INCREASINGLY OUTSOURCE

FIGURE 2 - % COST SAVINGS FROM OUTSOURCING PROPERTY MANAGEMENT

Property management is driving value beyond cost savings

0%

10%

20%

30%

40%

50%

60%

70%

0%

1%

2%

3%

4%

5%

6%

7%

0%

20%

40%

60%

80%

100%

Yes No

CA

GR

Percenta

ge of Respondents

who are in

creasin

g outs

ourcin

g

Net Income CAGR Net Income/Employee CAGR

34% 122%

VIEWPOINT

[CBRE Pty Ltd| 5AUGUST 2016 CBRE Research

FOCUS SHIFTING TO VALUE ADDERS TO DRIVE TOP LINE GROWTH

Property management is driving value beyond cost savings

VIEWPOINT

[CBRE Pty Ltd| 6AUGUST 2016 CBRE Research

a) The Drivers of Tenant Retention and Attraction

FIGURE 4 - RENEWER–MOVER SATISFACTION DIFFERENCES ON KEY VARIABLES

Source: CBRE Occupier Renewal Research 2015, from “To Stay or Not To Stay ” article

(10)% (5)% 0% 5% 10% 15%

Market

Labour

Quality of life

Infrastructure

Internal infrastructure

Service charge

Rent costs

Commercial management

Physical building facilities

Building management

First class maintenance and cleaning

Premium facilities

% Difference

Property management is driving value beyond cost savings

VIEWPOINT

•

•

•

•

Source: CBRE Occupier Renewal Research 2015, from “To Stay or Not To Stay”

[CBRE Pty Ltd] | 7AUGUST 2016 CBRE Research

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Secure premises

Comparable facilities to similar quality offices in the area

Trustworthy and well presented workmen

Safe, clean and tidy works

Modern utility provision such as ultra-band

Sufficient, quiet and reliable climate control

Clear communications and adequate notice for works

Sufficient and reliable lifts

Clear and responsive service for reporting faults

% Difference

•

•

•

•

•

•

Property management is driving value beyond cost savings

FIGURE 5- RENEWER-MOVER SATISFACTION DIFFERENCES ON

TECHNICAL SERVICES (%)

VIEWPOINT

[CBRE Pty Ltd] | 8AUGUST 2016 CBRE Research

Property management is driving value beyond cost savings

•

•

•

•

•

•

•

VIEWPOINT

•

b) Occupier Needs

•

AUGUST 2016 CBRE Research [CBRE Pty Ltd] | 9

Property management is driving value beyond cost savings

•

•

•

•

VIEWPOINT

•

[CBRE Pty Ltd] | 10AUGUST 2016 CBRE Research

Source: CBRE APAC Office Occupier Survey 2016, CBRE Research

Property management is driving value beyond cost savings

9%

9%

11%

19%

30%

32%

47%

53%

58%

0% 10% 20% 30% 40% 50% 60% 70%

Brand enhancement

No formal plan to implement alternative workplace strategy

Diversity (gender, cultural, generation etc.)

Business continuity

Employee attraction and/or retention

Business agility

Increasing employee productivity / output-based performance measurement

Cost savings

Better collaboration with customers, colleagues and co-workers

FIGURE 6 – MAIN DRIVERS OF ALTERNATIVE WORKPLACE STRATEGY

•

VIEWPOINT

[CBRE Pty Ltd| 11AUGUST 2016 CBRE Research

•

•

•

•

•

•

•

•

•

•

•

Property management is driving value beyond cost savings

VIEWPOINT

[CBRE Pty Ltd| 12

•

FIGURE 7- WHAT MILLENNIALS LOOK FOR IN A WORKPLACE WHEN LOOKING

FOR A NEW JOB - AUSTRALIA

Source: CBRE Research, Millennial Survey 2016 (Australia results - Full results forthcoming)

SUMMARY IMPLICATIONS FOR PROPERTY OWNERS

AUGUST 2016 CBRE Research

0

5

10

15

20

25

30

35

40

45

Cante

en

Coffee b

ar

Sle

epin

g /

rest

are

as

Wellness /

rela

xation facilitie

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Gre

en s

pace in b

uildin

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op

Gard

ens

Ability t

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hoppin

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deliveries

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tore

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es r

oom

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ers

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che

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e r

acks

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cle

anin

g s

erv

ice

None o

f th

ese

% o

f re

spondents

Currently provided Desire

Property management is driving value beyond cost savings

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,

we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and

completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be

reproduced without prior written permission of CBRE.

VIEWPOINT

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Property management is driving value beyond cost savings