Rebecca Kent (host)
This is JLL’s Perspectives podcast. I'm Rebecca Kent. We're covering a topic today that's absolutely fundamental to what I call everyone's sort of ‘what now?’ strategies, or put by people cleverer than me at JLL, their ‘Reimagine’ strategies.
It's data, and whatever the technology or other sources that we get it from.
And who needs it? Well, it's corporate real estate managers reimagining what a distancing-friendly, COVID-compliant, collaborative, productive, enjoyable, efficient, right-sized workplace looks like for employees; managers of buildings who are ensuring that those buildings, whatever role they serve, continue to be fit for purpose; and building owners and investors who are grappling with how to make returns in this economic downturn, and well beyond.
So we've got Michael Taggart, the Asia Pacific head of go to market at JLL Technologies. Hi, Michael.
Michael Taggart
Hi Rebecca
Rebecca Kent
And Sean Pereira, the Asia Pacific head of business intelligence and analytics, also at JLL Technologies. Hi, Sean.
Sean Pereira
Hey Bec, thanks for having me.
Rebecca Kent
So, Michael, we suddenly went to remote working and everyone was having to do most things through digital means. And it vaulted us all forward some people have said five years into the future in the space of just a few months. So, how has that changed information that businesses have access to, and the information that businesses need now to move forward?
Michael Taggart
A number of the systems they had previously, I think they'll continue to use. There'll just be an increased focus on the management of those systems and the accuracy of the data they're going to need to better understand what is going on with their workforce, as they work even more flexibly than they have historically.
But also you're going to see adaptations to existing systems as they try and address some of the new needs for reporting and data that have definitely come to the forefront since COVID-19.
And then there's going to be a lot of complementary types of technology that weren't necessarily introduced solely as a result of what's happened with COVID-19, but have also been able to pivot their products or add additional features or functions to their products that are now going to provide data that's going to contribute to organisations having a much better understanding of what is going on in their workplace.
Rebecca Kent
Can we dive in a bit more specifically to what some of that hardware and software is that we expect or we should be turning to, to make more data-led decisions?
Michael Taggart
Yeah. You can almost look at it through two lenses. The first one being that organisations had started to increase the priority of having a really good understanding of what their real estate portfolio look like today. And so this wasn't something new. It's definitely something that hasn't just accelerated specifically as a result of COVID-19. But organisations wanting to understand really accurately exactly how much space I have, where is this space, how does this space align with market rates, with lease termination and end dates, and stuff like that.
So I think there's definitely an increased focus on all of what we typically consider to be core real estate applications - so tools that handle things like space planning and management, lease administration, portfolio forecasting, those types of things. They'll become core applications that every organisation will need, because they'll need to have really accurate transparency around things like their portfolio.
The second lens, I think, is more around the world of IoT (Internet of Things) and sensors. Not just sensors, but data sources that exist in buildings, or will exist in buildings, that are going to give both a combination of more real-time data around how the building is being utilised. But probably more importantly - and this isn't new, but it's definitely an increased focus - how they can get a really good understanding of what types of spaces and amenities and areas within the workplace are being used and how that's changed based on people's perception of social distancing and working more flexibly from home.
We saw organisations start to look at things like workplace sensors that could provide insights into the types of spaces that were being used currently in a workplace. And maybe that could contribute to the design and fit out of a new workplace if they identified that conference rooms were being used, but smaller conference rooms are being used more often than larger ones. How would that contribute to what the new workplace would look like? And likewise, if people were ‘touching down’ in the office more than they were permanently sitting there every day of the week. Maybe more touch-down-type space would be needed.
So lot of those smart building, smart workplace-type sensor devices that provide that really accurate and granular information about what employees are actually doing in the spaces, how often are they coming in, when are the busy periods throughout the day? Do we see a shift towards people just coming in for one day or two days a week, and only coming in for a few hours just to be collaborative with people for smaller amounts of time, and then spending more time working elsewhere? All of those devices are going to help paint that picture more accurately and will allow organisations to get a better understanding of what the actual impacts have been. And then not only that, over time, continue to monitor it.
Sean Pereira
I’ll actually just add to that, Michael and Bec.
What you've seen pre-COVID was a was a mindset of, throw the word technology and data analytics - and try and view them as being synonymous to each other - at the wall and see what sticks.
There's now a mindset during COVID and probably post-COVID of saying, ‘okay, what business questions am I trying to answer, what data sources and technologies do I need?’
But a question that I'm actually challenging our clients with - and clients are actually quickly realising - is flip that narrative and start to say, instead of pushing ahead and looking for the new answer to the question, say ‘well, what data do I already have?’ and start to adopt a mindset of inference.
You look to our fintech colleagues, they’re probably some of the best to operate in that inference space. Look no further than mergers and acquisitions. What can we infer from a company that we're trying to buy, by looking at quantitative information?
But the corporate real estate world actually has tons of information. We’re notorious hoarders. So in our world trying to say, ‘what happened over a period of time that maybe there was some similarities that we can draw to what we're seeing here in COVID, where there's been perhaps, a change, as Michael mentioned, of people being stuck in the office or a forced mentality of working in the office, to this work-from-home mentality? Of course, it's accelerated now. But that quick change can we extrapolate something from what we've seen previously?’
And further to that, to what Michael just mentioned, of course, there's an adaption and a thinking of ‘what are the new technologies or specific technologies that I need?’
But what I'm seeing with clients at the moment is rather a focus on ‘what business questions do I need to answer?’ Let's approach this through a technology agnostic mindset and really start to say, ‘what information am I looking for here?’. So an information sort of mindset.
Rebecca Kent
Real estate being notorious hoarders. I love that concept. So where do you even start to mine some of that information and what are the questions businesses should be asking of themselves?
Sean Pereira
Yeah, it's a very good question and I guess, how long have we got here to really break down the corporate real estate space?
But I'll give you a probably a tangible example that that may help. So, let's take the investor market as an example. So I'm working in the investor market, and I'm trying to talk to someone in the hotels or pub space. Our traditional data will tell us great transactional information such as buy, rent, sold. And we can start to look at that over time, back from the 90s, and the 80s, all the way up to the 2000s. Along that time, the 1992 financial issues we had there, in 2008, as well. What happened in that timeframe in our historical data and how can we extrapolate that and look to that now in 2020?
But where I'd look to combine this, is saying let's tap into non-traditional data sources outside of CRE (corporate real estate) and bring those to the fore and see if we can stitch together a narrative.
So back to my investor story. If I'm talking to a client right now, and the client’s saying, ‘actually, we think we've got a bit of capital that we could invest in an asset - a pub or a hotel. Now, Sean, is that really the right time to do it? Now? Are we buying it on unders? Are we paying overs? Or can we get a distress sale or something?
So my historical data may tell me that yes, median price change, or variance, is going to do something which is similar to what I saw back in 2008. So perhaps I'm buying it on unders. But pre COVID, what can I know about that asset in terms of how it was being utilised?’
So a great use of data is Uber’s traffic flow. Uber movement, which is an open source that you can tap into, shows the most viable data and useful data around traffic flow over a timeframe. So I'd be looking at that data source and saying, well, this asset was used a lot between the periods of 10am and 1am, perhaps, and I can see that that has obviously dropped off over COVID. But at its peak, it was quite utilised.
Now I can use traditional JLL data to check how that asset has changed over time in its median price, or capital growth, and start to sell back to my client that perhaps, although it seems like a conservative mindset, or a saving mindset at the moment, perhaps it’s time now to have an earning mindset, in terms of utilising and buying assets that are undervalued. So that's how we can start to use historical data that we have, but also use new data that's available.
Rebecca Kent
With regards to the workplace, are workplace managers asking the right questions and looking in the right places for information?
Michael Taggart
A lot of the existing systems that are in place today support probably a lot of the answers that people are trying to find in the current environment. It may just be that they're not maximising the use of those solutions. Or they don't understand necessarily what the full capabilities of products are.
Sean Pereira
Rebecca on that, I'll give you a tangible example. So obviously IoT sensors was a big thing pre-COVID. And everyone was trying to move into that. Now it's become very important because we've had a change in mindset in the industry as a whole, from a density optimisation mindset to a distance type of mindset.
But now, where you start to utilise that information differently, and as Michael said, definitely into the future, is we've installed these sensors, we've moved from density to distance. We're able to track people sitting too close to each other. Is that 1.5 meters here in Australia being maintained? These type of questions.
But let's try and take that information and use it more broadly into the future. And I'll give you an example of facilities management and a cleaning schedule.
If I'm able to know the frequency at which a kitchen or a meeting room or the toilets (as in, the frequency in and out of the doors) is being used, I can start to optimise my cleaning schedules to how frequently I need these people to come in and clean the office. It’s tactical. Of course that helps me financially, but it also helps keep health and safety and these types of issues at the forefront of my mind as a CRE leader in my business.
So I don't think these things are going away. It's rather focusing far more on that inference piece, using the data that's coming in and being able to yield that. We've got great ingredients. The technologies that we're going to implement. They’re only going to get better. But what recipes are we sticking to? I think that's going to be the exciting part moving forward.
Michael Taggart
And just to add to that as well, Sean. That point about comfort and control in the workplace and wellbeing in the workplace is obviously even more important now than it ever has been.
I think people were definitely moving towards employees having greater control in general because they have it in their in their personal lives now and there's no reason why the workplace shouldn't be supporting that too. So I think there’ll definitely to be a much bigger focus now on making people feel like they have control and that they have comfort when they do come into the workplace. Because there is obviously a lot of uncertainty. People are, I wouldn't say living in fear so much, but there are definitely risks associated with returning to the office too soon or even returning in general.
And so these data sources and the technology that we know we have access to, we are going to use these not just to answer questions, but to help employees feel comfortable in the workplace and help them realise that as an organisation, our employees’ wellbeing is front of mind. That is, we are focusing on it, we want to make sure that if you are coming into the office, or if we are going to request that you do, that you feel good about it. And if you don't, that's obviously not going to help productivity or collaboration.
Rebecca Kent
How do you suggest people who have access to that data and information make that information transparent to end users who you say would like to feel like they have some control over their safety and the way the operate in workplaces?
Michael Taggart
Yeah, I’ll give you one example of something that we've definitely noticed as a trend and a lot of increased activity with in systems or tools, or even just in general. It’s the theory of booking desks. So we know that organisations have had systems and tools for booking things like conference rooms and meeting spaces, historically. So that's definitely not new.
But the whole world of being able to book desks in advance of coming to the office. You know, I can speak to some examples that I've experienced recently where, unless you're at an office by 8am, it's extremely rare that you'll get a seat. And if you get a seat, it's not a seat that you ideally want to sit in.
So there's definitely a push towards allowing employees to see what the utilisation of their floor or their building looks like before they come to the office. And if they're going to make the effort to sit in traffic for an hour, or if they're going to make the effort to get on a bus to come to the office, they want to know that when they get there, there'll be a seat near the colleagues they want to collaborate with or that they want to work with.
And so again, that sense of control, knowing that if I'm coming into the office, particularly in the times we're living through, where there is some risk, if I do make the make the effort, I want to make sure I'm going to have a seat available, it's a seat I’m going to feel comfortable sitting in.
And then just thinking back to Sean's point. I want to know that that the desk is clean, that the cleaning crews or the facility management team is actually taking sanitisation and things like that seriously. And again, all of those little things will contribute to people feeling more comfortable and feeling like they have control in the workplace
Rebecca Kent
Companies are watching the budgets very carefully now and they might see investment in tech as maybe a nice to have. So what would you both say about investment versus value?
Michael Taggart
I think one thing we've focused on a lot with customers or clients is that there's absolutely been a push and an increased appetite into new and what we'd call really advanced or cutting edge types of technologies around contact tracing and even to an extent the IoT piece we've mentioned around workplace sensors and stuff like that.
And while I think it's healthy to have an appetite for some of that technology, there still needs to be a bigger focus on some of the core and fundamental systems that just don't exist in the workplace still today.
I mean, we still have conversations where people are managing various processes or functions within Excel. And Excel is a great tool, but it's not a system you can rely on to provide accurate insights, or best practice around how you'd answer some of the questions that are being asked today.
Rebecca Kent
The end goal for the clients you're dealing with, the organisations. Is it broadly the same?
Sean Pereira
The story is the same. It's just we've taken a little turn in it. And obviously it's quite a big turn with COVID. But the narrative changed a little bit.
But what I say to that is we've just got to understand that question, understand where we want to go. And now more than ever, property is really about people. It's not about the tangible assets, it's about the people who are coming to deliver work for us and here to do a task and do it to the best of their ability. Because they've chosen to work for us.
So we've got to give them an environment that enables them to the best of their ability. And that may change in the future, where that's a combination of their home and the office. But when they come back into their office we've got to make sure that it's an environment that they want to be in, which is synonymous with their home environment.
And similarly, as we start to talk to perhaps different clients that are looking to expand real estate portfolios at a time like this, or optimise them, it's about how can we use historical information, new information and piece all that together to give them the best possible advice. That's where I see the world's going. We were on that track already, it’s just been accelerated a little bit. So it's very exciting.
Rebecca Kent
That's a great note to finish on. All right, Sean - I'll call you Sean ‘inference’ Pereira. Thank you very much for your participation. And Michael, thank you. Such an interesting conversation.
In October, JLL Technologies is hosting the webinar, ‘The Smart Office of the Post-Pandemic World’, covering a lot of what we talked about here but also more specifically the tech that your office needs for a safe and healthy return to work and what you're risking if you choose not to invest.
Spots are limited, so get in fast, and you can register through JLL’s Perspectives Podcast page - that's jll.com.au/perspectives-podcast.
And there you can also get in touch directly with Michael or Sean and read their profiles, and listen to all our other Perspectives podcast episodes.
Thanks for listening, I’m Rebecca Kent.