For asset owners navigating the impacts of the global pandemic, much has changed in the market. But there are some things that will never change.
First and foremost is the need to understand your asset. Really understand your asset.
That means conducting condition audits – extensive assessments into its current state and likely issues in the short, medium and long term so you can make informed decisions.
Now is the perfect opportunity to build that knowledge. With most assets currently operating below capacity, as an owner you can take the time to rigorously examine where your infrastructure is doing well and what is at risk.
Equally important is clear and regular communication with all stakeholders – whether they are tenants and facilities managers utilising the asset on a daily business, or the engineers, services and others you trust to help you maintain your asset. Clear, honest communication with all stakeholders is key to building trusting relationships with the people you rely on most.
The third constant is doing the basics well. Despite the move to digital technologies and a space where ‘I just press a button and everything is done for me’, we must get the foundations right. And this comes down to experience. It used to be that facility managers were the caretakers of their buildings and knew every inch of the property. But increasingly they are little more than security guards who perhaps didn’t follow the traditional route to the facility management role. The big issue with this is that they don’t have the knowledge and experience to challenge contractors and the result is the tail wagging the dog.
As an asset owner, if you are doing your due diligence, ensuring you understand your assets and keeping clear lines of communication with all of your stakeholders, you will be the ones best placed to navigate the challenges and changes that the new normal has brought to the fore.
A current example is that we are now in a lessees’ market. We are seeing only around 50 percent of tenants coming back with the ensuing empty or underutilised office space leading to organisations downsizing, subletting or offloading their accommodation entirely.
On the upside, this situation does give more scope for capital works, and carrying out these works in standard office hours, which is less expensive and disruptive. A life cycle assessment helps you make informed decisions regarding upgrade works and pushing out capital. And with fewer tenants in most sites, there is an opportunity to implement measures that may both entice them back and allay any fears they may have about doing so. “You can actually move that fund forward and look at end-of-trip facilities or increasing comfort from a tenant perspective,” says Ron Zachariah, director (NSW and ACT) – Building Services at Nutbrook Engineering Group. “Some are going to cycle or walk to work because they’re reluctant to use public transport.”
This reluctance is also behind the number one request we are currently seeing from the tenants that have returned to their workspaces – car spaces. But they only want them part-time.
The trend is for some tenants to come back to CBDs, but solely in the middle of the week. “Clients take the long weekend and work from home most days. Tuesdays, Wednesdays and Thursdays are when there are the most people in offices,” says Zachariah.
A knock-on effect of employees preferring to work remotely is increasing adaptation of commercial stock, with build to rent on the rise. This comes with its own issues as the current lack of international students, along with tenants wary of future lockdowns displaying a reduced appetite for city high-rise living, results in hard to fill spaces.
Pressure on rents and office usage is having a perhaps unexpected but welcome impact on sustainability. Good office managers are going into assets and conducting rigorous reviews of energy usage and efficiency. “They’re being proactive, making sure that if buildings are vacant, services like the air-conditioning is not turned on,” says Zachariah. “You can see the trend, asset managers realising that if they actually manage their buildings properly they will have instant savings that they can target.”
Above all, the most important consideration is to have that comprehensive knowledge of the entire asset. A condition audit with a 10-year assessment and asset register will capture all the important elements and give asset owners the information to make smart calls regarding capital works, maintenance plans and building optimisation. Unfortunately, up to half of the B and C grade buildings in Australian CBDs don’t even have asset registers, but this is just one area where an engineering consultant like Nutbrook can assist.