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Innovation

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By Sophie Hazeu

A WHILE ago I conducted a post-occupancy study with a number of managing directors.

I was exploring their reasons for choosing the prime real estate into which they had recently moved and the majority of respondents, bar a few who mentioned bike racks and lockers, stated location, rent, rates and square footage as their top priorities when acquiring that particular property in central London.

Sophie Hazeu

Sustainability was on the list but not the top five. No surprise there then.

However, research RealService has carried out recently suggests that seems to be changing and the Road to Cop26 – the UN Climate Change Conference, which Glasgow is hosting in November – is being paved by property companies who are full of good intentions.

That is great, but alongside those who are champing at the bit to refurbish their stock with green credentials are those who feel these costly changes are unfair and unfeasible. Nick Leslau, Chairman of Prestbury Investments, highlighted this in his Property Week article Our Industry is being set up to fail.

‘Carbon neutrality or we will leave’

Nick may have a point, especially when it comes to retro-fitting old buildings. But there’s still an opportunity here and it’s one every property manager should take because during the aforementioned research, on how loyalty impacts on the likelihood to re-occupy, we found that despite good relationships with the landlord and high loyalty to the location/estate, some occupiers stated categorically they would leave at end of their term if their goal of carbon neutrality was not supported.

Consequently, I then began to think about how this high level of ‘Defection Risk’, despite high loyalty, could be identified and then mitigated without having to scramble to achieve the costly changes Nick identified.

We already know that the impact of Covid has produced rapid change in the property market, mainly bringing in hybrid working plans far earlier than previously anticipated. An immediate desire to restructure offices into ‘collaborative spaces’ over desk-based business is, and will continue to be, a huge disrupter for property owners.

A further challenge on the horizon is the increase in weight given to the sustainability of a building as being a prime factor in leasing real estate. This factor is being set out by customers as a clear benchmark – which needs delivering and appears non-negotiable. For some, it’s overtaking the traditional drivers of rent, rate, square footage and service charge.

Create a ‘sustainability champion’

So, it seems property managers have a choice.

They can do nothing and run the risk of losing occupiers for whom carbon neutrality is an important aim.

Or, they can capitalise on this new driver (along with a more flexible lease offering in the short term), by developing sustainable buildings which, in the long run, may enable a higher rate to be demanded.

This is the time to take the sustainability advocate out of the corner, raise their status and create a ‘sustainability champion’ who has a voice.

This champion has a hugely important role in understanding customer perception, and setting their expectations.  This person needs to be able to multi-task.

  • Environmental reports need to be delivered to customers on time (most take six months to deliver an electricity invoice)
  • Reports must be customer-friendly, usable for investors and appropriate for delivering board-level results
  • They must be a trend spotter; what are the latest customer ‘must haves’?
  • They must be able to engage with customers and learn from them whilst managing a realistic sustainability plan. This last point is vital.

So, if the sustainability champion is the means of mitigating ‘Defection Risk’, how can this risk level be identified in the first place?

Defection risk matrix

Working for a major global client, we carried out a number of in-depth interviews and assessed the responses in a Defection Risk Matrix.

This matrix evaluates how effectively ‘loyalty creators’ – like demonstrating empathy and engendering trust  – are being delivered.

We then looked at the ‘loyalty indicators’, to establish whether the customer’s commitment to the landlord, or the property, was strong enough for them to re-occupy against all other factors, such as achieving carbon neutrality in 2030.

Essentially, we were determining whether the customer’s loyalty was enough to mitigate against all the reasons they may wish to leave.

The results enabled the client to identify priority customers where loyalty needed to be enhanced, and therefore the risk mitigated. And, this is where the sustainability champion also comes in; to partner with each customer on their intentions and needs.

We can help you spot customers who would be on your Defection Risk High list. But you can start supporting those for whom sustainability is a key issue right away.

Create the sustainability champion, make sustainability a deliverable goal and keep your loyal customers loyal to you.

If you would like more information on how we can assess your customers’ loyalty, please contact us at info@real-service.co.uk.

WE are very proud to present our latest innovation; ladies and gentlemen, clients and friends (cue fanfare), this is the brand new RealService Dashboard.

Created over the last 12 months from a RealService brief by Jon Saville, of our tech partners at Walnut Innovation Limited, and our own data supremo Lasha Gegidze, this live reporting tool will make it possible for our clients to analyse their data in real time and in more segments than a chocolate orange.

“It’s a brilliant, new versatile tool which will bring up-to-date statistics and customer insight to our clients,” said RealService director and chief operating officer Louise Freethy.

It’s especially useful for clients with diverse portfolios who might want to monitor trends by country, or by sector and it provides both the macro and the micro view. Want to know your NPS score over the last five years? It’s all there. Want to know what a specific occupier said in response to a specific question in a specific building in Poland? That insight is there too, in Polish and English, at the click of a button.

Lasha Gegidze … RealService data supremo

Daily refresher dynamic

“It has a daily refresher dynamic, it looks modern and enticing and the information is easily navigable,” said Lasha. “Clients can add new pages so it’s bespoke to them and the data is sliceable and diceable in every way.”

While RealService was the driving force behind the brief, it was Jon Saville at Walnut who had the technical know-how to make it happen.

Based near Peterborough, Walnut have worked with RealService for around 10 years.

It started with our Quest system, the cloud-based client portal which securely stores the transcripts from the thousands of interviews RealService conduct every year.

Jon Saville … dashboard designer

“We were given the opportunity to redevelop the Quest system, which was a substantial piece of work – in fact, it took two years,” said Jon.

Focused on the needs of clients

“This dashboard is similar and it has been an interesting journey. RealService are completely focused on the needs of their clients and they want to deliver the best service. It’s our job to give them that support.”

Jon sees the dashboard as a real value-add.

“It is completely integrated into the Quest platform so any data put into Quest is reflected on the dashboard.

“The other advantage is that all you need is a web browser or mobile phone in order to see it. It has been designed so there is the least amount of ‘friction’ between the data and the user.

See at a glance and track trends

“The immediacy in the way the information is presented means you can see at a glance what it’s trying to say and track the trends. It’s pretty much piped into your eyeballs!”

If you are thinking of conducting Voice of Customer research and would like to hear more about the dashboard and our other services, please contact Louise Freethy, our chief operating officer, at the email address below.

Louise Freethy can be contacted at: Louise.freethy@real-service.co.uk.

Walnut Innovation can be contacted via www.walnutinnovation.co.uk.

Welcome to our series of CX Conversations.

If you are a property company unconvinced as to the value of customer experience, please listen to our series of interviews with key figures from different sectors. We’ll be posting over the coming weeks and our interviewees include:

  • THE CUSTOMER. The head of real estate for PwC speaks stridently about the levels of service and engagement he expects as a major customer and he offers up a future of the office as ‘business theatre’.
  • THE ASSET MANAGER. The head of sustainability, Europe, for a global REIT talks about the importance of retention and reputation as key drivers for revenue.
  • THE LANDLORD. The director of occupier & property services for a major UK landlord explains the value of communicating with customers and how building relationships will serve them well in what are likely to be tough times following the pandemic.
Chris Richmond

1. The customer

This first interview is with Chris Richmond, senior head of real estate for PwC.

We asked him about the services he expects as an occupier, the role of managing agents and their preparedness for post-pandemic office life. Oh, and we also touched on the future of the office itself.

Next time, Kaj Bakker, head of sustainability (Europe) at Cromwell Property Group, will talk about being the middle-man, the asset manager serving two masters – occupiers and investors. It’s understanding occupiers, he says, which will drive retention, reputation and revenue.

RealService, Founder & MD, Howard Morgan will chair a webinar in the British Property Federation’s ‘MyBPF – Digital Series’ on 29th March. He’ll be exploring the customer experience skills gap and how we can ensure our industry has the right skills for the future. Full details and sign up here

https://bpf.org.uk/events/property-s-got-talent-new-skills-required-for-a-post-pandemic-world/

Nurturing a diverse and skilled workforce is a key element of the BPF Redefining Real Estate long-term agenda for change.

Pre-pandemic research by RealService for British Council for Offices (BCO) identified that “the disruptive forces reshaping the way we work call for an equally disruptive response in the way we serve our customers” and that “there is a wide and increasing skills gap in both the quality and quantity of talent able to deliver the customer experience expected by occupiers” The Coronavirus Pandemic has widened the gap and called into question how we educate and recruit in the property industry.

This webinar will explore “What is the mindset and what are the skills that the property industry needs to nurture for the post pandemic world?”

Speakers include

Prof Yolande Barnes
Chair
Bartlett Real Estate Institute

James Ainsworth
Head of Estate Management
PwC UK

Lynne Keenan
Executive Director, Head of Scotland
MAPP

Harriet Jones
Producer
Experience Makers

 

RealService, founder & MD, Howard Morgan, has been appointed joint course director for the new CX in Real Estate – Future Leaders Programme launched by Experience Makers and the Bartlett Real Estate Institute .

Experience Makers is the real estate industry champion for customer experience professional training and research. The Bartlett Real Estate Institute (BREI) is part of University College London’s world-class faculty and the focal point for all built-environment professionals to re-think real estate.

The CX in Real Estate – Future Leaders Programme is the first short course of its kind to combine academic research with industry insight to provide a vital understanding of customer experience strategy in property, and the skills to implement it.

This exciting initiative is the culmination of research and consultation carried out by Experience Makers and partners that highlights an alarming gap between current training and the skills required for a fast evolving and increasingly service-driven industry.

The impact of coronavirus has plainly revealed the property industry’s reliance on its customers. The call for new and improved knowledge on how to create attractive and healthy places that respond to customer need has only increased.

Fellow course director Prof. Yolande Barnes, chair of the Bartlett Real Estate Institute, said: “This new short course is an exciting next step in our journey to explore the richness and diversity of the value that real estate generates.

 “The programme sets out to open minds to new ways of thinking about real estate in the Covid-19 era and will equip students with practical tools to put this into action. Our ambition is to foster a new generation of professionals who see real estate not as a commodity, but as means to deliver an outstanding experience to customers.”

The CX in Real Estate – Future Leaders Programme is aimed at ambitious individuals working in all areas of property and its related fields, who recognise that real estate has evolved and who see themselves leading CX programmes at asset, team or business level.

Initially delivered online via eight units over six weeks, the intensive short course provides participants with a rewarding learning experience, equips them with practical tools to take back to their business and offers the chance to be part of a new alumni of property professionals with a customer mindset.

The CX in Real Estate – Future Leaders Programme is supported by Experience Makers members and developed in consultation with an Advisory Group of leading organisations passionate about pushing the industry forward.

These include The Crown Estate, Get Living, MAPP, Savills and Transport for London. Their involvement ensures that the programme is rooted in real-world aims, actions and successes.

Howard Morgan, said: “RealService was founded 20 years ago with the ambition to transform our industry’s approach to customer relationships. RealService is a proud supporter of Experience Makers with it’s mission to champion education and research in customer experience in real estate. I am thrilled to be collaborating with Professor Yolande Barnes and UCL Bartlett, an academic partner that shares our ambition to rethink real estate.

 “I believe that this programme is an international first and am excited to welcome participants from the UK, Europe and the rest of the world.

 

Following the success of the first programme held in June the next programme will start in November 2021. Information about the next course is available here:

https://www.ucl.ac.uk/bartlett/real-estate/study/short-courses/cx-real-estate-future-leaders-programme-short-course

 

 


 

 

About BREI (+ UCL press office number +44 (0)7747 565 056)

 

The Bartlett Real Estate Institute is a new global institute that is rethinking the traditional view of real estate. We offer MSc programmes, short courses and research opportunities that critically evaluate real estate within its wider societal, economic and environmental context.

 

About Experience Makers www.experiencemakers.com

 

Experience Makers are the real estate industry champions for customer experience professional education and research supported by a network of leading organisations and trailblazing individuals committed to pushing the industry forward.

 

02/08/2021

By Sue Flatto

We can all see that the pandemic has accelerated some important working trends. There has been an increase in flexibility in terms of where and when people work. Automation of jobs has been pushed forward on the agenda with technology enabled working catapulted into our lives, and the horizon for robots replacing repetitive tasks and use of AI moving even closer.

At RealService, we have been talking with occupiers and observed that, although people who have been forced to work from home (WFH) by the pandemic have found that technology has enabled them to do that successfully, what is missing is the sociability and serendipity of the office. Companies are grappling with rethinking what the office is for. The working models based around most people spending most of their time office based has been shattered and forward thinking employers are going back to the drawing board and building a new model.

Whilst we are still in the midst of the pandemic, it is easy to look at the empty office space and conclude that people want to stay at home to work, and some studies, such as Leesman, show that people think they are more productive and are happy working from home. However, Professor Lynda Gratton, of London Business School points out that there are gaps that employers need to recognise and factor in.  The office also provides opportunity for socialising, networking and creativity. These things are very difficult to do remotely. Bruce Daisley, author of The Joy of Work, and Eat, Sleep, Work, Repeat, agrees that there are gaps that need to be filled when people are all at home, only meeting on Zoom. Those random, chance conversations after face to face meetings and informal brainstorms are valuable to organisations. As this plays out, companies are likely to find that they are missing these vital aspects of working life.

Research done during the Covid crisis says that, not only have people enjoyed working from home but, without the daily commute, they have been able to spend more time with their families and more time working. However, Lynda Gratton suggests that this has come at a price. Some feel isolated and unconnected and many are missing out on chance conversations and random meetings and connections which spawn creativity. It is essential to take on board that employees have their own, individual, experience of WFH and to understand what they are. No two WFH experiences are the same and so no single answer will suit everyone.

Bruce Daisley believes that the ‘Hotelification’ of office space will become the norm with companies forming team hubs that meet in the workspace together at pre agreed times. One thing we can all agree on is that to entice people back, the experience of being in the office needs to be better than being at home.

Another point that needs to be taken into account is ‘Zoom fatigue’. There is a limit to how much the brain can absorb, using this medium. We all need a social break now and again and some human interaction.

So how will businesses move forward?

One pointer for the future comes from  Kevin Ellis, Chairman, PWC who on 20th October 2020 is quoted as saying

“From the messages I get from our people I know that many really value having the option to use an office, whether for a personal or business need. In the longer term it will be important to continue to ensure offices offer people something more than they can get at home, whether it’s working together, innovating or learning. I am sure I’m not alone in wanting this to be the case.”

But not all employers see things the same way and it’s our view that office life will not go back to where it was before the pandemic. Some organisations are already designating employees and long term homeworkers and this trend is likely to continue. Perhaps the term ‘office’ will become obsolete, in favour of ‘workplace’. Businesses will need to re draw what work looks like, and what and where the workplace is. They will need to identify aspects of job roles that can be done at home, and others that would benefit from having people together, at least some of the time. They will need to gather insight into how their employees are responding to the new world.

So as we go through this pandemic, and come out of it, as we surely will, and as future of work emerges, we need to remember that we are inherently social beings and business need to harness the value of social interaction in a way that gives us the best of both worlds. In all of this, one thing is still true – customer and employee experience is everything.

Does your organisation have the skills and insight it needs to navigate its way through this new world?

RealService, like many other businesses has had to pivot our services to meet the needs of our clients during the pandemic, and we have been helping them keep even closer to their end customers.  For landlords, developers and managing agents, this means gaining more insight into the behaviours and emotional needs of employees and finding a way to be part of the solution not the problem.

If you’d like to discuss how you can think differently about the future of your office portfolio, contact:

 

Sue Flatto

Director

RealService

 

+44 203 393 9603

 

 

 

 

 

 

 

There’s a joke about outrunning a bear that Benedict Cumberbatch (as Alan Turing) tells in “The Imitation Game”:

There are two people in a wood, and they run into a bear. The first person gets down on his knees to pray; the second person starts lacing up his boots. The first person asks the second person, “My dear friend, what are you doing? You can’t outrun a bear.” To which the second person responds, “I don’t have to. I only have to outrun you.”

In the first blog in this series I looked at the ‘Stages of Change’ model and our reaction to change, which our body perceives as a threat.

This blog looks at whether, faced with the Covid-19 crisis, it’s better for the property industry to pray or lace up its boots!

From bricks and mortar to hospitality

It’s more than 25 years since I returned from the USA with a vision for our industry founded on the principle that we are “no longer in bricks and mortar business but part of the hospitality industry”. An industry inspired by the best hotels, seeing our tenants as guests rather than an anonymous income stream. It’s seems common sense now but it was close to heresy back then!

Some in our industry saw this idea as a ‘scary bear’, and prayed it would go away. Fortunately, others ‘laced up their boots’ and they’ve become our clients and friends.

Last week Property Week launched a campaign to “Save the Office!” encouraging the industry to lead from the front on the return to the office. Of course, it’s sensible to ‘underline why workplaces are so important and showcase best practice so employers can help their people return to the office confident that the appropriate Covid-19 safeguards are in place’. But I can’t help feeling that if this campaign is to be successful it needs to look beyond saving “bricks and mortar” and at “saving our customers”. Let me explain.

Offices will be saved not because developers like to build them, investors to own them and corporate leaders to enjoy their corner offices, but because people choose to work in them. Employees of the past had no choice where they worked but that’s different now. Covid-19 has broken the dam and given employees the taste for a different workstyle. The rows of empty desks in our cities and business parks are the strongest reminder that it’s employees who are our ultimate customer.

The latest data from Leesman doesn’t give much comfort to the “pray’ers”. 82% of 127,000 employees surveyed agreed with the statement that “my home environment enables me to work productively”. That is 19% points higher than the 63% of employees who say they have a productive workplace.

Insight

At RealService, we believe that the future of the office industry lies in getting in-depth insights into what motivates both the 82% “productive at home’rs”, and the 18% who looking for a different solution.

But if only it were that simple! There are a lot more than two types of customer, and the task of creating a new vision for the future workplace requires a granular understanding of the needs of the close to the 30 million people who form the UK working population. You can then scale that up to include the 1.25 billion knowledge workers across the world (source: Forrester).

We can learn lessons from the hospitality industry (itself decimated by Covid-19) where the focus is on asking “what is the experience that our customers want?”. For the property industry, this means applying the tools and techniques of service design to our existing assets and future developments. The starting point for our asset management or development plans should be “who is our customer and what are there practical and emotional needs?” and not “how much space can we get on the site”.

Likewise, our customer retention strategies need to step out of the world of spreadsheets and into the world of loyalty and brand building.

At RealService we believe that the successful development, asset and property management strategies of the future will be shaped by standing in the customer’s shoes. It’s only by truly aligning ourselves with the ultimate customer, that we’ll be able to outrun the Covid-19 bear.

So, we’re campaigning to “Save our Customers” and their businesses, and hope you’ll join us!

____________________________

Howard Morgan is the founder and MD of RealService

If you’d like to understand ways that RealService customer research, consulting and training is helping our clients to get ahead in the Covid-19 era please contact

Howard Morgan howard.morgan@real-service.co.uk

 

www.real-service.co.uk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eerie silence

I ventured into London last week for only the second time since March. There was an eerie silence in the heart of the City of London.  Working from home has sapped the lifeblood out of the financial district. My gut feeling is that we are witnessing a once in a lifetime step change in the way we work. I also think that it’s as futile for office investors to see this is a temporary blip as it was for retail property investors to believe that online shopping would have only a minimal effect on our high streets and shopping centres.

For those whose careers have been built on building offices in the City, it’s only natural to have self-belief in their products. Like me, you’ll have read the interviews which put forward the line that 1. We are social creatures 2. Teams can’t work well when separated 3. Young people need to learn by listening 4. Sandwich bars deserve our support. ….so it’s only a matter of time before the problem goes away and we return to the way things were.

I liken this self-belief to that shown by shopping centre owners who confidently told consumers that there’s no substitute for being able to try on a dress or shoes in store. Meanwhile the percentage of online sales has grown year on year. Retailers saw that the future was multi-channel long before shopping centre owners. For shopping centre owners, being invested in just one channel has proven a scary place to be.

Blended working

Flexible (or blended) working is the workplace equivalent of multi-channel retailing. It recognizes that one solution doesn’t fit all and that each business needs to think through what’s the best blend of workplace solutions for its customers, suppliers and employees. For some businesses that answer could still be the 9 – 5 traditional office but for the majority it will be a blend of office/hotel/cafe/business centre and home working.

Technology is enabling the change in workstyle with high-speed broadband and low-cost software tools like Zoom and Teams making it possible to work from anywhere. Covid-19 has added another reason not to commute to the heart of our cities, but the underlying trend towards flexible working is not new.

If we accept that office real estate’s biggest competitor is now the ability to work from anywhere, then the question for owners is “what can we do to compete?”. At RealService we’re excited by the opportunity to work with our clients to better understand the desired workstyle of employees. We are already seeing a move away for the formulaic and to the creation of a new and exciting range of products and services which give companies and their employees the workstyle they want.

For those financially and emotionally invested in the old model, this will require a transformational change in thinking.

So how ready is your business to change its thinking?

Real estate has a fundamental health problem but how ready are we to face up to this?

We can learn a lot from the Stages of Change model used by the medical professions.

https://rcni.com/hosted-content/rcn/first-steps/stages-of-change-model

The Stages of Change model describes the different stages we go through when we want to change something in our lives. This readily translates into the world of business

  1. Pre-contemplation: This is where we’re not thinking seriously about making a change or we don’t really see it as a problem.
  1. Contemplation: We’re now beginning to think about our business models and we’re beginning to see that maybe there is a problem that’s affecting our long-term business health.
  1. Preparation/determination: By now, we’ve realised that something needs to change, and we’re ready to make changes – but maybe we don’t know exactly how, so we look for help.
  1. Action: We now know what we want to change, we’ve researched how we can change it, and we’ve got a plan to put into action.
  1. Maintenance: We’ve got to a position where we can sustain our new approach
  1. Relapse: we may revert to our old ways when the market begins to strengthen or it just gets too difficult

Where is your business at today?

The starting point for real estate business leaders is to ask where are we today in terms of our readiness for change? It’s time to be honest. Do we have the energy and resolve to change? Do we have the clarity of customer insight and vision to take action?

In this new series of blogs, we’ll look at ten strategies to accelerate your business through the change model.

 

Howard Morgan is Founder & MD RealService, customer experience consultancy

 

www.real-service.co.uk

 

To discuss any of these themes contact Howard at howard.morgan@real-service.co.uk

Howard Morgan, Founder and MD, RealService and senior consultant, Dr Danielle Sanderson will be speaking at this webinar hosted by GRESB on Tuesday, June 16 

Program:

1. Presentation of research from Professor Danielle Sanderson and Howard Morgan, Real Service covering scientific evidence of the correlation between occupier satisfaction and performance of real estate portfolios: “Occupier satisfaction and its impact on investment returns from UK commercial real estate”. The outcome proves that it pays off to engage with your tenants and occupiers.

2. Necessities and unique selling points for investors in real estate! Rob Palter, senior partner at McKinsey and Company will present a summary of the article “Commercial Real Estate must do more than merely adapt to the Corona Virus” with their worldwide vision of the consequences for stakeholders in real estate coping with the 6 feet economy.

3. Worldwide status of consequences of Covid-19 for the office market in Europe and the US by Jeroen Lokerse, CEO of Cushman & Wakefield NL. “Practice what you preach”. Emphasis on the required modification in working environments caused by the 6 feet economy. Worldwide consultants of Cushman advise tenants on making their working environment Corona-proof. As Cushman’s organization returns to the offices in several countries, hear their experiences.

4. Theories and measures to enlarge the safety (the 6 feet economy) of people are necessary, but how are they perceived? Phil Jonckheer, founding partner of Keepfactor, will present this new emphasis in their platform and their tenant engagement program on the perception of the occupiers about safety, health, hygiene and well-being.

Following the presentations, an online Q&A will be hosted by Steven Pringle from GRESB.

Jun 16, 2020 05:00 PM in Amsterdam

Register here https://gresb.com/event/webinar-social-distancing-or-working-from-a-distance-consequences-of-covid-19-on-the-real-estate-office-market/

 

It’s 2020 and here at RealService we’re celebrating our 21st birthday ……..the perfect time to dust off some past predictions.

When we launched the business on 2nd January 1999, we were greeted by the industry with a mix of encouragement and incredulity. “Advising on how to treat tenants as customers – how are you going to make money doing that?” asked one doubtful Prop Co CEO. Fortunately, others were less sceptical.

We’ve proudly made a name for challenging the industry with disruptive thinking and ten years ago published our 10 point “2020 Vision” for the future of customer service in the property industry.

How times have changed since then! Just look at this ringing endorsement of the customer-focused approach from Stephen Hubbard, CBRE’s chairman, retiring after 43 years in the business (source: Estates Gazette).

I would counsel against anybody getting into capital markets without having gone through the occupier side of the business…. unless you understand how an occupier thinks, how are you going to reflect it in what’s going to be a decent long-term investment?”

At RealService, we’ve proudly championed the simple notion that occupiers drive value and we’re excited to be entering a new decade. We’ll soon be revealing our Vision 2030 but first, let’s see how our 2020 predictions (made in 2009) have stood the test of time.

 

RealService Vision 2020 predictions

1. Property companies will become recognised brands

Ten years ago there were no real estate owners in the top 100 global brands and, in truth, there still aren’t any. https://www.ft.com/content/3a3419f4-78b1-11e9-be7d-6d846537acab

But what this list doesn’t reveal is a considerable effort that property owners have taken in the past 10 years to build their reputations. Today’s property companies and investment managers recognise that reputation matters to occupiers, investors and the wider community.

At RealService we help some of the largest property owners and managers in the world to track and benchmark their customer loyalty through our RealService CX Index which gives them in-depth insight into how their brands are perceived.

For further evidence of the importance of reputation just look at the growth of GRESB over the past 10 years. Back in 2009 APG, PGGM and USS came together with the University of Maastricht to design a real estate survey. They wanted more transparency on the ESG performance of their real estate investments and closer engagement with their managers. The inaugural Real Estate Assessment was launched in 2009, and GRESB was born. In the years that followed, an entire industry has come together to develop a common language and consistent approach to measuring and reporting on ESG performance. Today, more than 100 investors, representing over USD 22 trillion AUM, encourage their managers to report to GRESB, and the resulting Real Estate and Infrastructure Benchmarks cover more than USD 4.5 trillion in real asset value.

RealService is proud to be a GRESB partner and you can read about our recent joint event hosted by The Crown Estate here.

RealService has been tracking how Europe’s leading investors and listed property companies are presenting their brands to their customers and investors for the past 8 years. We have trawled their websites and their report and accounts documents and will be publishing our findings shortly.

At a micro level it’s fascinating to see how emerging sectors like Build to Rent residential are working on brand building. There is an active battle to build a consumer facing brand. Businesses like Get Living, Essential Living, Tipi, liv, urbanbubble and Go Native, are striving to win brand recognition.

2019 was the year of brands in the office sector with our clients Landsec launching new flexible office brand, Myo, offering leases ranging from 12 months to three years for businesses that need space for between 15 and 80 people. British Land continued to expand Storey, and The Crown Estate launched its first flexible office space at One Heddon Street.

Of course, 2019 will be remembered as the year that emerging global brand, WeWork, flew too close to the sun. A salutary reminder that a sustainable reputation must be built over time and on a firm financial footing.

Vision progress score: 6 out of 10

 

2. Property businesses will be better understood and valued for their consistently high level of service

There’s some progress here too as we move from a passive to operational style of asset and property management. You’ll hardly find an analyst presentation that doesn’t make reference to what a propco is doing to enhance relationships with occupiers and how it is working to create “great places”.

A good number of our clients like The Crown Estate, SEGRO and Great Portland Estates publish their customer service performance based on independent feedback gathered by RealService.  But there’s still some way to go before commercial real estate is valued not just based on income and bricks and mortar, but also on the loyalty of its customers. We expect loyalty indicators such as Net Promoter Score (NPS) to become even more widely adopted in the coming year.

Vision progress score: 5 out of 10 

 

3. The property industry’s customers will be more knowledgeable with information at their fingertips to help them make informed decisions about which suppliers are best

It’s more than ten years since review sites like TripAdvisor began to get real traction and peer reviews taken seriously. In the USA, websites such as www.apartmentratings.com, founded at a similar time to TripAdvisor have become the must go to site for renters.

The UK market has traditionally followed the USA and the launch of HomeViews www.homeviews.com in 2019 in the UK is further evidence of increasing transparency. As Homeviews says “One of the biggest decisions we ever make, financially and emotionally, is choosing a home. Our mission at HomeViews is to share useful, trustworthy insights about residential developments to support you in making that decision.” The site has gained impressive traction in its first year.

Another rapidly growing indicator is WiredScore whose certification helps occupiers find office space that will fit their current and future connectivity needs.

Vision progress score: 5 out of 10

 

4. Service quality and performance will be measured on a consistent basis across the world

The last 10 years has seen huge progress in terms of the standardisation of performance measurement in the areas of sustainability, wellbeing and workplace. At RealService we see the potential to extend this approach to evaluate the service quality and performance of buildings in all sectors. In 2017 we launched the RealService Customer Experience Index which is designed to enable our clients to compare their performance with best in class. We’re motivated by the vision of a worldwide standard for service performance and see this emerging as global investors become more demanding of information about operational service performance.

We’re excited to see the GRESB benchmark extend its reach into the measurement of social impact and looking forward to collaborating as partners.

RealService is also working with industry network group, Experience Makers www.experiencemakers.com to develop a series of new indicators to help measure the return on investment in customer experience (ROX). We believe this will help our clients make better decisions about where to invest to make the biggest impact of customer experience and loyalty.

Vision progress score: 5 out of 10

 

5. The products and services offered by the real estate industry will become more clearly defined and differentiated as opposed to an amorphous mass where one size fits all

Looking back 10 or 20 years the typical property owner or developer was opportunistic and with notable exceptions, not sector focused. The last recession highlighted the dangers of dabbling in sectors where you have no specific customer knowledge. Since then we have seen the emergence of sector and sub-sector specialists in the mainstream product areas like offices and retail and also in new sectors such as healthcare, student housing, self-storage and even caravan parks. The residential sector has led the way with a whole range of new products – live-work, co-living, retirement etc.

As real estate transitions from a brick and mortar business to a customer experience industry we are seeing this trend accelerate.

Just when you think you’ve heard it all, how about this innovative new property sector from California. Bisnow is currently promoting an event called “THE SOCAL CANNABIS CRE EVOLUTION – The event explores “ where are institutional investors looking as California continues to cultivate innovation centers, coworking cannabis spaces, and trends in cannabis retail offerings?” https://www.bisnow.com/events/los-angeles/the-socal-cannabis-cre-evolution-3359

Vision progress score: 7 out of 10

 

6. Relationships between property suppliers and customers will prosper in line with other industries i.e. founded on a partnership style of doing business where mutual understanding/symbiotic relationships exist

A couple of years back I visited the John Lewis National Distribution Centre at Magna Park, Milton Keynes. I quickly learned that the graduated blue and white cladding is just a wraparound for the automated handling systems provided by JLP’s Austrian equipment supplier KNAPP. It was the most impressive example of supplier partnering that I had seen in ages: a symbiotic relationship that serves the ultimate customer brilliantly.

Our vision remains that occupiers and their property suppliers will one day have a similar degree of mutual dependence. We increasingly hear occupiers tell us that they have a preferred list of landlords / developers / property managers that they like to do business with. Our clients are spending far more time and resources researching the needs of occupiers and of the end users of buildings.

We expand on our vision in this article authored with Jon Lovell of Hillbreak. http://www.real-service.com/the-civil-partnership-solution/

Our research with major corporate occupiers indicates that they are finding its far easier to forge partnership relationships with the new style flexible office businesses like The Office Group, Fora, IWG and WeWork than with traditional office landlords.

It will be interesting to see the impact of the initiative by LGIM Real Assets (Legal & General) to establish a new innovative operating model for managing its buildings, which it claims will “help disrupt the property industry, maximising the performance of investments and developing stronger occupier relationships.” https://www.legalandgeneralgroup.com/media-centre/press-releases/legal-general-shakes-up-property-management-industry-with-new-operating-model/

Another example of the partnership approach is The Crown Estate appointment of JLL as managing agent to its entire Central London portfolio. Commenting on the appointment James Cooksey, Director of Central London said:

We believe that working closely in partnership with a single managing agent will enable us to better collaborate and drive efficiencies to improve quality, consistency and encourage innovation.”

Vision progress score: 5 out of 10

 

7. The property industry will become more transparent about the way it does business and the costs of doing business

Feedback from occupiers tells us that the industry still has a long way to go before it is as easy to do business with or as transparent as other sectors. We’re excited to see some real innovation coming out of the PropTech sector and it’s refreshing to see many new entrants challenging the traditional way that, for example, real estate transactions are conducted. There’s also been a lot of progress in the residential sector to streamline the process of renting an apartment with a new law banning the charging of letting fees to applicants, with paperless leasing and pre-qualified financial checks.

Service charge costs and a perceived lack of transparency continue to be the bug bear of many occupiers. This is particularly acute in the retail sector where even the likes of John Lewis & Partners have signalled their distrust in the system with a threat to take unilateral action if costs are not reduced. There is continuing concern about insurance commissions too.

Vision progress score: 5 out of 10

 

8. The property industry will move from being self-focused to being obsessively customer inspired

At RealService, we’re fortunate to work with many of the most customer focused property investors, developers and managers. The fact that our business is growing is evidence that the industry is investing more in customer research, improving skills and changing cultures.

In the last 24 months, we’ve seen the focus of our clients’ attention move from simply satisfying customers at a “business to business” level to providing a great customer experience to all those who shop, work and live at or around our clients’ real estate. In essence the real estate customer challenge has become no different to any other “business to consumer” industry. This calls for new skills and talent and we’re excited to be helping our clients to make this exciting transition.

This change in business focus requires our industry to make a huge cultural shift. We have identified a significant skills gap and explore this in our latest report for British Council for Offices http://www.real-service.com/alchemists-hold-the-key/

Vision progress score: 6 out of 10

 

9. The property industry will play a leading role in demonstrating how industry in general can minimise its impact on the environment and actively work with its customers to minimise their impact too

This is a particularly strong area for our sector and we have seen some outstanding examples of best practice. A quick look at British Land’s website shows the wide range of environmental initiatives and targets that are typically being followed.

RealService is a GRESB partner and we are looking forward to working with GRESB to increase the focus placed on occupier engagement as part of a responsible approach to property ownership and investment.

An important industry commitment was unveiled by the UK Green Building Council (UKGBC) in 2019 including a framework for the UK construction and property industry to transition new and existing buildings to become net zero carbon by 2050, in line with the ambitions of the Paris Climate Agreement. https://www.ukgbc.org/news/uk-green-building-council-presents-industry-framework-for-net-zero-

Vision progress score: 8 out of 10

 

10. The property industry will develop a clearer understanding of the link between adopting customer service strategies and performance

This has always been one of the Holy Grail topics for our industry. While the intuitive case for treating tenants as customers is strong, we can now point at the academic research by Dr Danielle Sanderson for quantifiable evidence. This PhD research co-sponsored by RealService and the Lord Samuel Memorial Trust has identified a 1.9% total return loyalty bonus which can be achieved by increasing customer satisfaction by one whole point on a 5 point scale.

Dr Sanderson is a consultant at RealService and we are working with clients to use big data techniques to better understand this important link and to be able to use customer feedback as a predictive tool of occupier behaviour at future lease expiry or break.

The next stage of our work is to be able to more accurately measure the return on customer experience (ROX) at an individaul asset level.

Vision progress score: 8 out of 10

 

How are we doing? –  2020 and beyond

If you add up the progress scores you’ll see that the industry is close to 60% of the way to achieving the 2020 Vision we set out 10 years ago.

We’re very proud of our work over the past 21 years and would like to thank all our loyal clients, colleagues, collaboration partners and industry friends for your support.

It’s time to look forward to 2030 and we will shortly publish our Vision 2030 which will be even more stretching and entirely shaped by what customers want.

We’re looking forward to playing our part in the real estate customer experience revolution in 2020 on beyond.

Can we help you?

If you’re interested in chatting about how you can capitalise on these trends in your own property business please give us a call +44 20 3393 9603.