Wednesday, 23 March
8:00 – 10:45
Welcome & Opening General Session
How Economic Pressure Shapes the Society
Sponsored by Jones Lang LaSalle
It has finally arrived! The first full day of the Corenet summit 2011 started with a light breakfast and networking session before the delegates, of which there are a record 420 this year, were ushered into the Grand Ballroom.
Following an opening address from Angela Cain, Chief Executive Officer for CoreNet Global, and a summit overview from William Taam, the new chair of the Asia Regional Council (congratulations William!) we were ready for the first General Session.
Expertly chaired by Jones Lang LaSalle’s very own John Forrest we were introduced to Dr Dr Walker Walker, Founder and Managing Director of Asianomics, who was speaking to us today about “How Economic Pressure Shapes Society”.
Dr Walker explained that as “a Scottish economist that applied the Austrian approach of economics to Asia” we were going to hear some very different concepts to those we may have heard before. Dr Walker also highlighted that we wouldn’t get a tinted view of the world but a realistic one!
After explaining some key principles Dr Walker went on to say that most companies in Asia are in reasonably good shape. As a result of the Asian Crisis 12 years ago, governments and companies had cleaned up their act and were on solid financial ground going into the Global Financial Crisis. This is the reason for the swift turnaround in Asia and why it is leading the recovery.
Dr Walker opined that inappropriate monetary policy in the US meant that their problems are long term, “We expect the US to double dip over the course of the next 6 months or so” he said. He also added ”that the private sector is already deleveraging…and when this takes place it lasts for decades. This will lead to sub-par economic growth and periods of recession”. Dr Walker’s view on the state of Europe was also clear “Europe is much worse!”
So what for Asia?
Dr Walker’s thoughts on the three big economies were as follows:
Japan should be fine, albeit, given recent events will have to go on a rebuilding phase. In Dr Walker’s view this would result in Japan selling much of its stock in other countries to fund this work which will in turn have a negative effect on other markets in the region.
In summary Dr Walker reiterated that most companies were in good shape and that the region had accommodated inflation well. Growth in China will fall away and India will pick up the mantle.
Not all doom and gloom but definitely not tinted!
– Nick Clifford
11:00 – 12:30
Breakout Session 1
Emerging Technologies' Impact on Urbanization and the Workplace
Meng Chew Ching, Regional Director, APAC/China, GSK – BIO
Peter Miscovich, Managing Director Corporate Solutions, Jones Lang LaSalle – BIO
Gordon Feller, Director, Urban Innovations, Public Sector Practice, CISCO Internet Business Solutions Group – BIO
Gorden Feller, director of Urban Innovations at Cisco, and Peter Miscovich, Managing director of Corporate Solutions at Jones Lang LaSalle, opened the discussion on how new technologies will shape the urban landscape and workplace in the near future. It was evident from the start that both are experts in their fields and have a passion for the subject. Moderated by Meng Chew Ching, Regional Director of APAC/China at GSK, the 60 attendees or so enjoyed an informative and entertaining session.
Gordon started by explaining that 4 Mega Trends will change the world. These are:
He further commented that the extent of urbanisiation is changing as technologies evolve. Gordon presented an interesting case study on Cisco’s work in Amsterdam where the Government have promoted the creation of Smart Centers in each district. These are places where people can go and use Video conferencing facilities and other technology to assist in their work life. This, as Gordon succinctly put it, means people don’t need to “commute to compute”.
Peter Miscovich explained that we should be thinking about “mobile everything”. Cloud computing and smartphones mean that all manner of jobs can be done anywhere in the world. He referenced a recent Morgan Stanley paper that stated “that the mobile Internet in 2015 will be a greater advancement than the invention of electricity in how it changes our lives”.
In a lively Q&A session the subject of the future costs per employee came up. With new technologies the amount of office space required per employee will reduce dramatically as will the cost of all the technology required for mobility. This will mean big savings for the corporate occupier.
Not so good for the real estate developers!
– Nick Clifford
11:00 – 12:30
Breakout Session 2
Shelley St: A Journey of Discovery Through New Ways of Working
Nigel Harris, Senior Real Estate Advisor, Chevron – BIO
Grant Baldwin, Division Director, Macquarie Group – BIO
John Harrs, Director of Design and Ideation, Haworth Organic Workspace – BIO
Grant Baldwin started with an introduction of Macquarie and its 320,000-square-foot workplace at No. 1 Shelly St. in Sydney, where no one has a desk – a workplace that reinforces Macquarie’s corporate goals and values. The role of Corporate Real Estate within Macquarie helps facilitate:
“What do we look for in a building?” Grant asked. The answer is location, cost, and, most importantly, amenity. So it is about the importance of time, cost and quality. “It’s not about the desk,” Grant said. “It’s about how it works. It’s about how people manage the environments, thinking in terms of experience not facilities.”
From facilities management to ‘trusted adviser’, it has gone through the below steps for implementation:
The vision: To create a connected workplace, visually, physically and virtually. “This isn’t about ‘you HAVE to shift your desk every single day’,” Grant said. “This is about creating flexibility.”
The implementation has resulted in an expected $100 million AUD in real estate cost savings, and also increased employee performance, with by 96% of employee-survey respondents indicating they do not want to return to the old way of working.
– Sherry Tse
11:00 – 12:30
Breakout Session 3
Christopher Horblit, President, Fidelity Real Estate Company, Fidelity Investments (HQ) – BIO
Paul Doherty, Senior Vice President, Screampoint – BIO
Matthew Sheldrick, Vice President Business Development, Qube Global Software – BIO
Joh Cuppello, CEO, Qube Global Software – BIO
In this seminar we had the “Iron Chefs” - Matthew Sheldrick from Qube Global Software, Paul Doherty from Screampoint, John Cuppello from Qube Global Software and moderator Christopher Horbit of Fidelity Real Estate.
Business intelligence for the corporate real estate can cover a lot of ground, but there is no right answer. “It is about the real time information source, a strategic tool and the business application framework,” Horbit said. After this seminar, the speakers gave us some important insights on the trend, issues and end-user expectations.
How can we relate that to today CRE? Integrating the information is not enough. End users demand so much more than that. We need to decide what you need to know. It is all about focus not fireworks. And it is always crucial to remember this is an evolving world. Data gets old in months. We can also benefit from right kind of technology tool. A tool comes with a good combination of interactive charts and matrices to create a real-time comparison of data. Sheldrick revealed some intriguing facts about the characters of the end users. “Many of us may think most of the end users are tech savvy, but they are not,” Sheldrick said. “Only 20% using BI tools are tech savvy. Don’t lose sight of that.” End-users always look for function rich and intuitive experience. When it comes to technology, Sheldrick suggests:
MMost organizations equate BI with information delivery, but the real value of BI is linked to achieving biz goals and improving biz performance.
“The rules have changed,” Screampoint’s Doherty said. “The fundamentals have changed. How? It’s called real time and the idea of mobility that you can have the info anytime, anywhere you want it. There is 2% global GDP loss every year from inefficiencies in the design, construction and operations of buildings worldwide.”
It is now possible to handle facility management through self-service technology tools. The traditional, functional software doesn’t live up to the expectation anymore, but Cloud computing can make this readily available and doesn’t require technological genius to use. The software comes with a user-friendly platform that processes real-time data. According to information provided by our panelists, 62% of companies are considering Cloud applications, while 70% clients using Cloud computing are experiencing successful expansion.
– Joyce Ho
SALUTE! Recognition Luncheon
On behalf of CoreNet Global, Angela Cain, CEO of CoreNet, spoke during the Salute! Luncheon to recognize leaders in the commercial real estate industry for their commitment to excellence to CoreNet membership.
Before recognizing these significant contributors, Angela introduced a distinguished guest, Mrs. Carrie Lam (Secretary of Development for Hong Kong, SAR), as a keynote speaker. Mrs. Lam presented on "Optimizing Hong Kong's Land Resources" which focused on the intersection of the economy and commercial real estate and what action steps the Government was taking to ensure optimization of its limited resource.
With a population of over 7MM people primarily in the service sector, Hong Kong is a densely populated area with limited space (6,480 people per square kilometer). Its international airport is #1 in airport cargo and #3 in container cargo. The city trend has been to move vertically which is tangibly seen through the numerous high rises dotting the city landscape.
Yet, only a quarter of the land is comprised of built-up areas. The remaining greenfield areas will need to be delicately discussed, balancing preservation and careful spatial planning. With over 108 outline zoning plans, the Government is carefully controlling land use to ensure proper development. Hong Kong also has a highly efficient transportation system whereby 89% of the population depend on for daily trips.
Hong Kong's strategy has been to integrate land use with transportation planning, which has been a qualified success given the ease of transportation around Hong Kong. Hong Kong would like to increase the housing supply in outer areas by building outer CBD "nodes" where clusters of population would dwell, complete with transportation links and Grade A space.
Hong Kong has also been focusing on sustainable land use (e.g. Kai Tak Development) through urban renewal strategies to maximize use of land for the public, in addition to providing subsidized housing for the poor, and contributing to elderly support for the aging.
The Government is open to working with developers on further developing the land through potential joint ventures and investment opportunities. Land revenue is a significant portion of the Government's livelihood; 2010 is estimated to have brought in $60B USD or 17.5% of revenue.
After the well-received presentation by Mrs. Lam, Angela, along with other CoreNet leadership, recognized several groups to much applause due to their positive impact to the industry: CoreNet Asia Leaders, Luminary Award Members, Top Rated MCR Faculty, and Graduates of MCR.
– David Chang
14:30 – 16:00
Breakout Session 5
Leveraging a Talented Workforce Across Asia
Sanjay Verma, CEO, Asia Pacific, Cushman & Wakefield – BIO
Peter Andrew, Director of Strategy, DEGW – BIO
Rajesh Mutreja, General Manager, Corporate Real Estate Hindustan, Unilever – BIO
Peter Andrew started the presentation with an introduction of Unilever and its more than 400 brands in more than 180 countries. From a workplace and corporate perspective, the company is creating and seeking:
Rajesh Mutreja discussed Unilever’s workplace strategies, especially in regard to talent, and the company’s case study on its Mumbai campus, which includes three zones – Vitality Zone, Connect Zone and Focus Zone. For Unilver’s Mumbai campus, “We’re all about people,” Mutreja said, and pointed out four key employee needs/wants and how Unilever addressed them:
Mutreja also pointed out the mindsets we need to build are:
To conclude, Mutreja emphasized three final points and goals for the organization:
– Sherry Tse
14:30 – 16:00
Breakout Session 6
What's Your Social Net Worth? Corporate Real Estate in the Attention Age
Hugh Andrew, Head of Asset Management at MGPA, moderated an interesting discussion on Social Media. He included a live Twitter feed that delegates could “tweet” to during the session, and they willingly engaged.
Speaking were Brian Crockford, Program and Operations Manager at Microsoft, Cecilia Tan, Regional Real Estate Manager for Proctor & Gamble, Jordi Martin, Managing Director, IFM Asia Pacific for Jones Lang LaSalle and Michiel Waaijer, Head of Digital at Eight Partnership.
Waaijer started by explaining what Social Media was and how it has developed. He pointed out that Facebook has 500 million users worldwide and that Twitter has 200 million. He also pointed out that Lady Gaga has an amazing 9 million followers on Twitter. While this statistic caused a chuckle amongst the crowd, it led to a very important point. She is able to reach 9 million people instantly when she has something to say..
The power to reach customers and colleagues this efficiently to gauge opinion, share ideas or simply keep in touch is why social media is becoming so important. Without embracing it companies can be left with a serious competitive disadvantage if they don't embrace it.
Waaijer also acknowledged that there is a lot to be learned from other sectors and emerging models but that we must also remember that, “It’s not about the property- it’s about the people.” Real estate services are not commodities, and human issues manifest in a diverse array of emotions and can at times prove the biggest obstacles.
So what are the practical experiences of the CRE professional? Microsoft, P&G and Jones Lang LaSalle have all embraced Social Media. All have Facebook and Twitter sites and Jones Lang LaSalle and Microsoft have You Tube channels in which to share ideas and research.
There are still issues that need to be addressed in the way these tools are used, such as security and privacy concerns. However, as the discussion continued in the Q & A session, the benefits were apparent. By embracing these tools, engagement with our clients and colleagues will increase, and with the quicker sharing of information we can improve service levels, relationships and, as Tan neatly put it, retain the Gen Y talent pool where social media is second nature.
– Nick Clifford
14:30 – 16:00
Breakout Session 7
FAS-Talking: Unintended Consequences of Global Lease Accounting Changes
The session kicked off with an explanation of the current state of IASB and FASB's proposed changes within lease accounting which has many corporate real estate organizations concerned. Changes have been in the works as a result of the financial crisis where the focus has been on greater transparency in financial statements. Changes have been discussed the past few decades, but significant changes have not been put in place yet. FASB and IASB have proposed wide-reaching changes and the wider community provided feedback (over 800 letters!) by the end of 2010. It is predicted that by June 2011, FASB/IASB will have resolved these issues and finalize changes prior to a leadership change. January 2013 will be the proposed start date.
Accounting changes will impact both the lessee (present value of lease on balance sheet, amortization and interest on the income statement) and lessor (discussion around a performance based approach, de-recognition approach, and fair value measurement IAS40). Yet there has been grumblings about the lack of consistency around certain key areas including: .
This has led to concerns around the staffing, subjectivity, systems, and costs which will be adversely impacted by these accounting changes. The session then switched gears to discuss how occupiers should react. High level steps that should be taken:
Though this is a simplistic way of viewing a potentially difficult issue (especially if the portfolio has thousands of properties), it is a high level approach that companies should focus on going forward. Companies have already begun to take a more strategic view of their portfolio. In a recent survey, 41% of companies listed anticipation of future business needs as a top priority. 56% of companies survey noted that it was difficult to have 100% data due to a lack of centralization of the organization. Obviously it will take a more strategically-minded, multi-disciplined CRE executive to maneuver through these minefields.
Yet, there is a silver lining: this could be the best thing to happen to CRE. The C-Suite is now mindful of these potential impacts and CRE will be viewed as a strategic function with greater opportunity to add value.
– David Chang