Lorna's Logic: Rock down to Electric Avenue

Everyone is, or everyone should be, worried about climate change. All hail the electric car drivers! However, not all of us can avail ourselves of these wondrous vehicles, and much must change before we can.

I am not writing this to bleat on about how living on a main road in London, without off-street parking, makes it less feasible to go all-electric, but rather to shine a light on a sad fact of life; not everyone who cares about the environment is a nice person…

I was recently in an all-electric Uber, the driver of which lives in Hackney. We got talking about the practicalities and apparently, unlike where I live, there is an abundance of charging points in Hackney. However, apparently, EV drivers think nothing of leaving their vehicles parked at a charging point, sometimes for days on end. How selfish is that?

The report “Clearing the Air” by Shaun Bailey suggests that Road Rage is potentially being replaced by Charge Rage. A statistic published by the DoT a few years ago suggested EV sales are increasing by 172% every 5 years (though still only account for around 3% of all cars - March 2023). The report goes on to recommend installing an additional 1.6k rapid charging points for London ASAP, but that won’t even touch the sides if self-interested EV owners hog them.

As far as I can tell, from my admittedly scant research, you stop paying for the electricity as soon as your car’s battery is full: so where is the incentive for the solipsistic among us to move their cars once charged? I can’t believe I am suggesting this, since I have more than a reasonable proportion of anarchist in me, but why not keep the meter running? Would that not go some way toward meeting the £30+ million we Londoners are going to have to find to fund the free parking for the selfish?

Lorna's Logic

The pen is mightier than the sword keyboard

At a recent face to face meeting (real people, real time), I was left feeling somewhat archaic when I produced a fountain pen and notebook in front of a bank of laptops and tablets. Furious tapping ensued as I carefully formed each word by hand and my feeling of being outmoded increased.

Fast forward though to a series of articles which have come my way, which support wholeheartedly the notion that “writing is better for you”! Noting, of course, that for some dyslexic and aphasic individuals, the current accessibility of typing is a godsend.

Nonetheless, even though writing by hand is undoubtedly slower than typing, the benefits range from a greater understanding and recollection of content to an enhanced sense of wellbeing. There are also several studies into how writing by hand cultivates greater creativity and can even help recovery in stroke victims.

I really am not a technophobe, far from it, but I am also firmly in the camp of ensuring we don’t throw the baby out with the bathwater. You could argue that typing is just a stage of writing development in the same way as the invention of paper and ballpoint pens were, and the printed word has been around since the 1400s at least. However, now everyone types, every child texts; handwriting is becoming a dying art – and I am aware of the irony that this blog is also typed.

Studies have shown conclusively that handwriting forces the writer to actively engage with the information and to process it conceptually rather than merely noting the detail verbatim. When writing by hand you have to instantly précis the stream of information and in doing so you absorb nuances and sentiment and, apparently, even develop your vocabulary.

Interestingly, the use of a stylus pen and tablet (which are becoming closer each day to “feeling” real) provides the same benefits as using paper and pen and so it is the creative act of forming each letter and watching the words unfold which matters most, not whether it is old-school or modern tech.

By the way, if anyone wants to buy me a reMarkable™, I will happily place my fountain pen in its own shrine.

“He read the letter again but could not take in any more meaning than he had done the first time and was reduced to staring at the handwriting itself. She had made her g’s the same way he did: he searched through the letter for every one of them, and each felt like a friendly little wave glimpsed from behind a veil.
The letter was an incredible treasure, proof that Lily Potter had lived, really lived, that her warm hand had once moved across this parchment, tracing ink into these letters, these words, words about him, Harry, her son.”

— J. K. Rowling

Lorna's Logic: Smoking causes coughing

I have been on holiday.

Yes, yes, I know – but although you might feel this is a common occurrence it really isn’t, and I needed a bit of confirmed sunshine.

Compared to ours, one of the obvious differences between sunny climes is the ability and tendency of people to meet each other face to face, out of doors, over a coffee or even a cigarette. I am not in any way whatsoever advocating smoking, but something fundamental changed when smoking became such a socially heinous activity. For a while, going outside for a smoke, brought disparate people together – far more so than smoking indoors did – and left those of us indoors with a bit of FOMO as we viewed our friends laughing and joking with random strangers. In our climate, here in the UK, this is still to be seen in the warmer months (haha), but rapidly changes as the temperature drops.

Accidental interaction with strangers (now being referred to as Vitamin S) has a well-researched, positive impact on well-being. So why, post-Covid, are people still anxious about meeting face-to-face?

Anecdotally, from conversations I have had recently, there seems to be a reluctance to “pop out of the office” for a chat/impromptu meeting, a reluctance to socialise and network after work (vital activity in the surveying world I posit), and, even more disturbing, a new tendency to clock-watch when attending the office at all.

We are wired to connect to others – introverts included – so why are we scuttling home at the first opportunity? Social isolation significantly increases the odds of premature death, ironically rivalling the likelihood of smoking doing so.

Whether you fear incidental interactions with strangers or crave them, they have apparently pretty much the same positive effect on your well-being so, go on, get out there and talk to strangers!

(Also, don’t bother going to see the French “comedy” of the same title of this piece, other than to interact with strangers of course).

Further reading: Sandstrom and Dunn 2014, Bernstein et al 2017, Van Lange et al 2021

Ems' Gems: The ESG challenges for nomadic businesses

Welcome to Ems’ Gems (aka EmS’ Gems - or just ESG!) - the combined blog of Emily Bates and Emily Brooks.
But will you be able to tell who wrote it?

The ESG challenges for nomadic businesses

I took a stroll down memory lane recently, courtesy of some old photos on my phone. They were just random snaps I took in central London one sunny day five years ago, which showed a bustling West End, its crowded streets packed with hundreds of people, like me, in smart office attire.

As I sit here working at home (dressed far less formally), it strikes me how different my working life was back then. Five years on and our research consistently shows how hybrid working is now a reality for many businesses, which are now nomadic.

However, there is a question we need to consider: is the move towards nomadic working helping or hindering the drive for improved Environmental, Social, and Governance (ESG) principles?

Integrating such principles into business strategies has become a core aspect of demonstrating sustainability and ethical responsibility. However, in the context of nomadic work cultures, there are challenges that often go unnoticed when it comes to monitoring ESG performance. Gathering reliable data can be complex at the best of times, and the tracking of energy usage and recycling by dispersed teams can be problematic for organisations without a permanent office. Given the widespread adoption of hybrid working, this is likely to become a growing challenge.

So, how can nomadic businesses substantiate their ESG commitments in an environment where work has no permanent location?

If, as a society, we are to be more sustainable in everything we do, businesses need to prove they are playing their part. It not only makes good business sense but would go a long way to reducing instances of ‘Green Washing’ - the deceptive practice of making exaggerated or false claims about the environmental-friendliness of an organisation or service.

The property sector needs to do more to help companies and organisations of all sizes record their ESG performances. There is an opportunity for providers of serviced offices and co-working spaces, along with office owners and managers, to improve how they share energy efficiency and recycling data with their occupiers.

Greater transparency from these businesses would enable nomadic teams to be more discerning in their choice of workplaces, selecting those that embody sustainable practices, offering data on energy consumption, and facilitating recycling initiatives. In turn, this would help the teams to more easily reach their own ESG targets.

I’m not sure if I’ll have any photos to show it, but hopefully, another stroll down memory lane in five years’ time will reveal how things have improved.

Do you prefer the office buzz or the hush of home?

What attracts you back to the office, or what keeps you away?

The modern work landscape is undergoing a seismic shift. Perceptions of what constitutes a 'workplace' have been fundamentally altered by the pandemic, underpinned by rapid technological advancements.

This seems to be a critical moment for the property sector. We're standing at a crossroads. The decisions made now about the workplace will reverberate for years to come, and the experiences, preferences, and insights of workers will influence what the office of the future looks like.

To try to understand the subtle complexities of today's work landscape, we've initiated a focused survey to explore the core of this evolution, to understand the lure of working from home versus the traditional office, the importance of workplace amenities, and the weighing of commuting against flexibility.

How has the rise of remote work and technological strides influenced your work preferences? To help us all understand the ongoing changes, please take part in our short survey. We’d also encourage you to share this with your co-workers, peers, and anyone else working in an office - full-time, part-time or even just occasionally.

https://bit.ly/3sbOcl9

Lorna's Logic: The Geek’s Ring Tone

Why I am still frightened of AI?

As a late-onset hippie, I spent last weekend at WOMAD, an amazing festival in the heart of Wiltshire. Although the theme is officially world music, art, and dance, there is also a surprising focus on physics and the festival attracts excitable physicists and the like. It was here that I “got to meet” the AI experts.

In a layout of open-air tables, 200+ of us managed to sit down in small groups and challenge/question/harangue the very developers and purveyors of the inestimably clever artificial intelligence sweeping the globe.

The overriding message from the experts was the old faithful – garbage in, garbage out – and, surprisingly, “don’t trust it blindly”; there was quite a focus on the terrifying speed at which AI can spread misinformation, and we were all encouraged to ask AI a question not just once, but several times over in different ways to maximise the chance of getting the best answer. It was the ‘under-20s’ who surprised me the most as they were the least trusting or welcoming of AI, though that could be just the demographic which attends festivals. Either way, there might be hope that the next generation will err on the side of caution.

As anyone who has seen the gloriously fun hokum, Mission Impossible 7, will agree – the idea that our lives could be so completely taken over by AI is truly horrific and yet disturbingly possible. I really am not an old stick-in-the-mud Luddite, but with everyone so desperate to jump on the AI bandwagon (just read recent property press for examples), are we sure we know what the hell we are doing?

This blog will self-destruct in 10 seconds…

Lorna's Logic: Oversharing Much?

The irony of me posting these comments on a (version of) social media, is not lost. However, I fear this is a topic which has to be put out using this method, as otherwise, it will be like shouting into an abyss.

There are surprisingly few recent studies into the impact of social media on business performance; maybe they are all still in process, or maybe I should be looking at TikTok to find them. One thing the studies do have in common though is that business use of social media is still tactical rather than strategic in its own right (1): for example, many brands are using it for B2C advertising without necessarily focussing on the customer engagement aspect. Social media, despite its pitfalls, could be used more extensively for strategic sales, relationship building, integrated communications, and employee engagement betterment. Allegedly.

However, it is the last suggestion that bothers me most. There may be a paucity of studies on the impact on business performance, but there is a world of research into the harm social media can and does do. An early study (2) demonstrated the significant reduction in job performance linked to social media exhaustion. ‘Technostress’ is just one new (irksome) word which has entered our dictionary, but what has happened to freedom of speech?

While some of the social media jockeys are trying to put forward thought-provoking content, many more are haters, reviling anyone who dares to speak outside the currently (demanded) norm and even disseminating falsehoods; the rest of us are too anxious to speak out in case we fall victim to a tsunami of abuse, personal and even professional.

Friends and colleagues have begun to withdraw from online exposure, stating there seem to be fewer meaningful conversations occurring in the property world.

The world of real estate, often a slow-adopter of technology, is not immune to this inexorable dumbing-down of content, this sanitisation of thought leadership, and this reluctance to stand up in case one becomes a clear target. Go on, take your best shot.

(1) Cartwright et al 2021 (2) Yu et al 2018

AI in real estate: how artificial intelligence is reshaping property markets.

We think AI will prove to be a game-changer in the real estate industry, providing invaluable insights and efficiencies across various aspects of the business. From investment analysis to property management, AI's data-driven approach is already empowering real estate professionals to make informed decisions and maximise their returns while optimising operational processes.

The real estate industry is undergoing a significant transformation due to the integration of advanced data analysis and artificial intelligence (AI). From investment analysis to property management, AI-driven technologies are revolutionising how professionals approach property management, asset management, building design and their strategies for business growth.

To give some insights into the capabilities of AI, I started by asking AI where it saw its use within the corporate world as a whole, and these can be categorised into four levels of automation. This is what ChatGPT came up with:

Assisted Intelligence (assisting with tasks, but authority lies with humans still):

 Chatbots and virtual assistants (for customer queries and basic support)

 Data analysis (automate data processing tasks, identifying patterns and generating insights for decision-making)

 Recommender systems (Analysing user preference and behaviour to provide personalised recommendations for products/content/services)

Augmented intelligence (combines human expertise and AI capabilities):

 Natural language processing (analyse large volumes of text and extract information, summarise documents to assist in research and legal document analysis)

 Image/video analysis (help healthcare, manufacturing, and security by automatically detecting anomalies or other patterns in visual data)

 Cybersecurity (aid response to potential security threats by analysing network traffic and user behaviour and finding anomalies)

Semi-autonomous intelligence (AI can make decisions but still requires human oversight):

 Autonomous vehicles

 Robotic Process Automation, RPA (AI-based bots automating routine and rule-based tasks, such as data entry, form filling, and invoice processing)

 Supply chain management (optimising inventory, demand forecasting, logistics – providing recommendations for human operators)

Autonomous intelligence (AI can operate independently without human interaction):

 Automated trading (making decisions based on market data and predictive analytics)

 Industrial automation (manufacturing, quality control and assembly lines)

 Autonomous drones (navigating, surveying, photographing, deliveries and infrastructure inspections)

This is a very good starting point, so where do we think AI and its various levels of automation can be integrated into the everyday activities of the real estate sector specifically?

What we are finding is that AI is a good place to start to get basic text and information about many subjects, this allows everyone to appear to be semi-competent in a range of topics, but this needs to be refined by the human writer to be of real use.

Let’s look at some of the case studies identified by the Remit Consulting team.

Investment Analysis:

AI-powered systems are now being used to analyse vast datasets of property market trends, economic indicators, and demographic data. By processing and interpreting this information, investors can gain a comprehensive view of potential opportunities and risks and help them to identify emerging trends and make data-driven decisions, reducing uncertainty and maximizing returns.

Risk Analysis:

With AI, risk analysis becomes more comprehensive and accurate. Factors such as property location, market conditions, and historical data on property performance can be analysed to assess potential risks. By identifying critical risk factors, investors can develop robust risk management strategies to protect their investments.

Property Valuation:

Automated Valuation Models (AVMs) utilise AI algorithms to determine property values accurately. Considering factors like location, property characteristics, market trends, and comparable sales, AVMs can provide reliable valuations. This not only aids in making informed purchase decisions but can, by suggesting competitive prices, also streamline the selling process.

Portfolio Optimisation:

AI can enable real estate investors to optimise portfolio diversification by considering risk tolerance, market conditions, and historical performance. Additionally, real-time monitoring of market trends, news, and social media sentiment could assist in identifying potential investment opportunities or risks.

Property Management:

a. Maintenance and Repair Scheduling:

By analysing property data and maintenance records against historical patterns, AI can be used to optimise maintenance schedules, predict failures, and minimise downtime. This proactive approach can improve property performance and reduces maintenance costs.

b. Energy Efficiency:

AI systems can be used to monitor energy usage patterns, identify areas for improvement, and suggest energy-saving measures. This helps reduce operational expenses and contributes to a more sustainable approach to property management.

c. Tenant Management:

Chatbots, powered by AI, can streamline tenant interactions, automating routine tasks such as reporting and scheduling maintenance issues and rent collection. This can help improve tenant satisfaction and free up property managers to focus on more complex issues, by assisting and training staff to provide a higher level of service.

Risk Management and Compliance:

AI is being used to assist fraud detection by analysing suspicious money traffic and other financial patterns. Additionally, it can ensure regulatory compliance in property transactions and management processes by monitoring regulatory changes and analysing legal documents.

Market Research and Demand Forecasting:

The analysis of property listings, demographic data, and consumer preferences by AI systems can help identify market trends, demand patterns, and potential investment opportunities. Additionally, AI models can predict demand based on population growth, employment trends, and socioeconomic indicators.

Embracing these transformative technologies will undoubtedly pave the way for a smarter, more resilient real estate market in the future. Should you wish to discuss the integration of AI into your business or learn more about our technology consultancy services, please visit: https://www.remitconsulting.com/technology or email elijah.lewis@remitconsulting.com

ReTour 2023: exploring the latest trends in active travel facilities

Remit Consulting's annual ReTour event, held recently in central London, not only brought together developers, architects, occupiers and active travel specialists to experience the end-of-journey facilities within a number of office properties, but went beyond the traditional cycle ride and included a dynamic 90-minute Q&A panel session, covering a diverse range of topics, providing an opportunity to have a comprehensive discussion about how the market is responding to the increase in active travel. Participants delved into crucial issues and emerging trends, aiming to shape the future of active travel facilities.

Here are some of the highlights and key takeaways from ReTour 2023.

Differentiating Between e-Scooter and e-Bike Batteries:

There is a growing concern surrounding batteries in the context of active travel facilities, specifically, a need to address the misconceptions between non-compliant e-Scooter battery fires and compliant e-Bike batteries. Unfortunately, this confusion has resulted in cargo bike operators being denied access to loading bays in office buildings. There is clearly a need to educate facility managers (FMs) about the differences between these battery types to ensure the safe and efficient integration of active travel facilities into urban environments.

Addressing planning issues:

Despite significant pressure to resolve the issue, the persistent challenge posed by planning conditions remains a blocker for active travel facilities in new developments. Some local authorities still enforce outdated end-of-trip features that do not align with the current market demand and industry standards. It is crucial for stakeholders in the active travel sector to collaborate with authorities to ensure planning conditions reflect the evolving needs of commuters and facilitate the integration of sustainable travel options.

Harnessing the power of data:

Data is a major untapped resource. During the Q&A, participants explored opportunities to pool data from various sources, enabling the active travel market to better plan and manage resources for the real estate industry. It was agreed that, by harnessing data insights, stakeholders can make informed decisions to optimise infrastructure, improve user experiences, and support sustainable transportation solutions.

ReTour 2023 highlighted the importance of collectively working towards sustainable transportation solutions, creating a future where active travel facilities seamlessly integrate with our urban landscapes, enabling healthier and more environmentally friendly modes of transportation.

A musical montage of photos from ReTour 2023

Active Travel and the opportunities for asset managers

The shifting landscape of active travel in office environments.

It is universally accepted that defining user requirements is critical to the success of property development. This was demonstrated in Remit Consulting’s 2022 report "Market Cycles II - The Impact of Cycling on Office Buildings," commissioned by the British Council for Offices (BCO), which concluded that bicycle storage alone is insufficient and that users need the best possible facilities, to meet the needs of all occupiers. We are now seeing a shift from quantity to quality.

Transitioning to a quality-driven approach.

In 2022 this shift was very apparent, and through Remit’s ReTour initiatives, we have witnessed an increased understanding that active travel facilities are crucial components of office specifications, affecting rental value and office occupancy. That being said, the balance is not yet right, and, anecdotally, it is common for cycle stores to see little more than 30% occupancy on peak office days. Consequently, developers and asset managers need to look beyond the daily commute and consider other active travel trends, such as the rise of cargo and e-cargo bikes, to maximise their returns on cycle facilities.

As the 2022 report called for, cargo bikes have been on the up in the last 18 months. As part of the preparation for the upcoming ReTour 2023 event, in London on the 28th of June, Remit visited nine London office buildings to evaluate the facilities, encountering a variety of policies regarding e-cargo bikes. While some buildings welcomed them, others banned them due to perceived battery risks. This issue requires the collaboration of stakeholders in real estate, facilities management, and the transport industry to ensure carbon reduction commitments are met.

Policy changes in UK cities.

Unfortunately, earlier this year, the Government announced a £200 million reduction in the active travel budget, potentially impacting infrastructure projects aimed at supporting cycling and walking initiatives in England. Despite budget cuts, it is heartening to witness UK cities drafting and adopting policies that support a more active travel-driven society. Birmingham and Leeds, for example, have considered limiting city centres to private cars in their transportation policies and strategies. Additionally, the Borough of Lambeth has developed a Kerbside strategy, with the aim of allocating more public space for cycling, walking, and dwelling. These initiatives signify a positive shift in mindset and a commitment to creating healthier, sustainable urban environments.

The journey continues.

The landscape of active travel in office environments is continuously evolving. The "Market Cycles II" report, coupled with our ReTour visits, showcases the progress made in designing office spaces that cater to the needs of active travellers. However, challenges, including budget cuts and policy disparities, persist - challenges that the property sector needs to address with all speed.

Should you wish to learn more about our work in the realm of Active Travel, our ReTour events, or would like to take part in our Active Travel Forum, please email contact Neil at neil.webster@remitconsulting.com

Lorna's Logic: Some like it hot

Next to parking issues, office temperature is the second most contentious topic that property and facilities managers have to deal with. While Sheila (name changed to protect the cold-blooded) is sitting there in a cardigan with a fan heater under her desk, her adjacent neighbour is adjusting her USB fan and complaining it is too hot to think! So in this week of supreme temperatures, how are those of us wedded to hybrid working coping in our sun-drenched homes?

I believe we all know that there is legislation to protect us from offices which are too cold, but no such control exists for when the temperature rises. Why is that?? I, for one, find it harder to think rationally or even reasonably when I am too hot.

A recent study by Loughborough University found that productivity could be reduced by as much as 76% at extreme temperatures. Admittedly, the study focussed on physical work, but it is not much of a leap to extrapolate the findings to brain power. Yale School of Medicine found even small rises in temperature affect the firing of neurons in the brain, and can cause them to go silent, only “waking up” when they cool down again.

Maybe I can attribute any stupid decisions to my current working environment, or maybe I should just decamp to a lovely air-conditioned office and give those neurons a wake-up call.

Lorna's Logic: Pointing at the Porcelain

Many years ago, whilst pregnant and looking as though I had swallowed a sofa, I toyed with the idea of writing “Fatty’s Guide to London Toilets” as manoeuvring myself and sizeable bump into certain cubicles was akin to a challenge in Total Wipeout.

However, my interest in the smallest room waned over time, until a chance conversation at a recent workplace conference. How do blind people manage the most fundamental of activities in a location unknown to them? Where are the cubicles, is the seat up or down (or is there a seat at all?), and, critically, how do you flush the thing? We are all getting used to the idea of waving at a black circle, but how do you know where it is or if you should be seeking a handle or pull-chain instead?

We tend to focus on mobility issues when designing for disabled people, but we are taking away a big chunk of independence from those who are blind or partially sighted in a personal and potentially embarrassing way. So come on, empathic designers, find a way to communicate these basic details to those who cannot see for themselves.

Right, off my soap box now (washing my hands before I leave, of course).

Lorna's Logic: Oi, Oi, AI – You looking at my job??

Be afraid, be very afraid…or don’t be. It all depends on what research you look at. AI is here to stay, possibly here to rule us all, but will it really take our jobs away or will it just make us morph into a different workforce?

According to some of the more frightening predictions, around 66% of jobs will be affected by AI, with around 25% being replaced completely. In 2013, some smart people at Oxford University predicted nearly half the jobs in America would be wiped out by now, yet they are not, and there is historic support to suggest job annihilation occurs much more slowly. The best example I’ve found is the automated telephone switching system: invented in 1892, fully implemented within the next 20-odd years, yet the number of manual operators continued to grow for a further 70 years!

Admittedly everything moves much, much faster now (showing my age again) but some governments are trying to put the brakes on and any delay will allow the economy to create new avenues for labour; about 60% of jobs in existence now did not exist 70 years ago.

My view? Truly original, creative thought and output will be the hardest to replace, especially when these mega-intelligent programmes are essentially born of a particular type of brain, living in its mum’s basement. I hope I am right.

One of my favourite movie quotes (aside from, “At my signal, unleash hell”), is from Jurassic Park when Dr Malcolm says, “Yeah, yeah, but your scientists were so preoccupied with whether or not they could that they didn’t stop to think if they should.”

[No bots were harmed in the creation of this blog]

Lorna’s logic: Data is? Data are?

As a self-confessed pedant regarding grammar, spelling, and all things literary, I am naturally drawn to the data-is data-are debate. Don’t get me wrong, I can split the odd infinitive and lapse into colloquialisms as well as the next person, and I do know when time could be better spent than by fussing over a solitary noun.

However, everyone else seems to have the time on their hands, so why not jump in? Data is such a hot topic at the moment, as we are beholden to them (see what I did there?). Without data, you cannot know your properties, without data you cannot realise your ESG strategy, without data, there would be no AI…which actually might not be such a bad thing. The list goes on and on, but so does the debate on data’s number agreement.

So here is my vote: data = a group of datum, it is therefore a “collection” of sorts. Would anyone out there say, “my collection are fantastic”?

Remit Consulting’s Return at Workplace Trends Research Summit #WTRS23

Looking to provide attendees with access to some of the best research into work and the workplace, the recent Workplace Trends Research Summit featured the most up-to-the-minute research and data-driven case studies, including Remit Consulting’s Return Report findings.

As well as presenting the most recent data to a packed audience, Remit Consulting’s Lorna Landells and Darren Yates also highlighted the issues surrounding the impact of the pandemic and the explosion of remote working practices, examined the possible impact on the office sector and how the widespread adoption of hybrid working might impact our urban centres.

The Return Report is produced by Remit Consulting on a monthly basis and follows an initiative established by the firm to monitor how the pandemic had impacted workplace trends, specifically office occupancy levels. The project was established in 2021 and involved close collaboration with the British Property Federation and The Property Advisors Forum. Both groups have been key supporters of the project and use the analysis within their ongoing dialogue with policymakers and the wider industry. The sample covers around 150 offices, 1,500 leases, and over 200,000 workers in ten UK cities. From the outset, data contributors have included major property managers such as British Land, Great Portland Estates, Cushman & Wakefield, Knight Frank, Workman, Mapp and Savills.

To find out how you can contribute to the research and receive monthly reports regarding the office occupancy rates, visit return.remitconsulting.com

Lorna’s Logic: Dash Dot Dot Dot

This is definitely going to sound sexist, but truly it is merely a statement of fact – or at least of “observation”. 

A sizeable part of what we do at Remit Consulting is to help companies with system selection. 

For those not in the know, these are generally the software tools which enable and facilitate all aspects of working with property.  There are many products to choose from and all have their strengths and weaknesses but the one common feature the software companies strive for is a dashboard.  (I can almost sense the audible “oooh” from the menfolk out there).

Just watch, next time you are being shown a demo.  As soon as a dashboard appears on screen, with its dials and speedometers bars, a portion of the audience will sit up straighter, rapt attention on their collective faces, and an excited intake of breath will follow.

All the software developers need to do now is work out how to give their products a walnut trim, and they will be gazillionaires…

Things you need to know about ESG and real estate - No.3

3. Time is on our side (but only for a little while)

With ESG factors increasingly influencing property investment decisions, buildings that have a high EPC rating are more attractive to investors than worse-rated buildings.

Fact: although only 15% of EPCs are currently rated below E, 85% are below B.

Whilst it’s easy to see how investors can discriminate against a relatively small number of substandard buildings now – even if they are exempt – it may be far harder to mark down much larger numbers of exempt buildings in the future.

That said, although the risk to the value of C- to E-rated buildings may be widely over-stated, there is no doubt that scarce A- and B-rated buildings may well command a substantial premium from investors and occupiers working towards net-zero carbon targets.

Talk to Remit Consulting’s Charles Woollam about your long-term ESG strategies.

Lorna's Logic: Just one Cornetto

It probably seems to anyone reading these snippets that I spend my life in the sunshine; oh, if only. However, this short trip away was a true city break and this time to beautiful Venice.

Venice fared pretty well during the pandemic, but then there are apparently only around 5,000 true Venetians living there: the rest are occasional, rich second/third homers.

So three things struck me about the place. Firstly, it is extraordinarily lovely and devoid of all cars and bicycles and so exhaust fumes (smelly canals and sewers notwithstanding) and vehicular danger are pretty much absent.

Secondly, though, it is virtually inaccessible for the disabled (I saw a total of four wheelchair users over five days and around the periphery only). For Venice this is virtually impossible to overcome without radically altering the historic infrastructure and so it will remain out of bounds for the physically disabled, though maybe a haven for those whose disabilities are linked to loud noises or bright, flashing lights.

Lastly, though, it reminded me of how those with money make it impossible for locals to stay so. How a born and bred Venetian could ever afford to own or even rent a property is beyond reality and similar to the situation on our own doorsteps.

Must go, as I am jetting down to my cottage in Salcombe.

Only kidding (I am a local, after all).

Have a happy Easter!

Things you need to know about ESG and real estate - No.2

2. The EPC bar is being raised, but just not yet

The minimum standard for an EPC is currently “E” but it was always intended that, over time, the bar would be raised, and the Government has stated that it would like the minimum standard to reach “B” by 2030. However, it has been slow to legislate.

Fact: The Government consultation on the Energy White Paper closed in June 2021, but the results are still unknown.

This must mean that there is now uncertainty over both the final detail of the proposed changes and the target dates for implementing any change.

While it is wise to have a contingency plan that anticipates the future trajectory, it may be unwise to incur significant expenditure that is designed merely to ensure compliance with future laws.

This does not mean that investors and asset managers should ignore the compelling reasons for improving the energy efficiency of buildings, but it does confirm the need for a tactical approach to ESG and real estate.

Talk to Charles Woollam about your long-term ESG strategies.

MIPIM 2023: Tightening belts, monetizing property data, predictive analytics, business focus and Dengue Fever!

MIPIM 2023 was a great success. In addition to gaining insights into the latest trends and developments across the industry, it was excellent to catch up with so many contacts and create new ones, in a relaxed environment that was so conducive to business.

MIPIM by the official numbers:

• Around 15% higher attendance than last year

• Four-day conference

• 23,000 registered delegates.

However, there were thousands more real estate professionals and experts choosing to meet in the cafés, bars, hotels, and restaurants along this small stretch of the Mediterranean.

Despite the reported numbers and the crowds inside “the bunker”, from the Remit Consulting perspective, there seemed to be fewer people inside the event than in the pre-pandemic years. This could be attributed to the increased price of attendance, but could equally be due to the more relaxed approach and familiarity with café culture these days. Our Dutch team reported that it was clear there were fewer representatives from the Netherlands than in years gone by. Interestingly, though, there was a noticeable increase in delegates and businesses from beyond Europe, particularly from the Middle East and North America. It also seemed that there were more “decision-makers” in attendance than historically. Even so, MIPIM retained a strong European focus.

There was much talk about consolidation amongst the many asset and fund managers with suggestions that smaller firms, with limited portfolios or those that focus on one asset class, will struggle to deliver acceptable returns. The consensus is that these mandates will be picked up by the larger asset (and property) managers, and there was chatter of investment funds increasingly looking to rationalise and improve on a pan-European basis.

What was the mood of the market?

With the sunshine, the fine wines and the good food, the mood in Cannes was, on the surface, one of optimism.

However, with the ongoing war in Ukraine, the collapse of Silicon Valley Bank and Signature Bank (and the worries about a possible international banking crisis), and the fear of a prolonged downturn, there was an underlying sense that times are tough and likely to get tougher.

The difficult market conditions were reflected by the scarcity of deals and transactions being announced, with the majority of press releases and news stories being issued by the brokers, focusing on specific bright spots and optimism rather than being more expansive.

The low levels of transaction activity inevitably led to cash-rich investors and their advisors circling at MIPIM and making it known they would be happy to hear about any highly leveraged properties and portfolios across Europe that might become available at ‘competitive’ prices.

Click here to watch Andrew and Lorna being interviewed at MIPIM by Costar News editor, Paul Norman.

The prevailing market conditions were also reflected in a sense of seriousness amongst attendees and a sense of determination to make the best use of time at the event. Yes, for many delegates it was their first MIPIM in four or five years, so there were myriad contacts to catch up with, but we had many meaningful meetings and discussions that were no longer than 30 minutes. Short, sharp meetings were definitely the order of the day.

The brevity of meetings might also explain the rumours that some of the big investment funds have chosen not to have yachts as their bases for entertaining and meetings at MIPIM in 2024. Experience teaches us that, physically, getting onto and off some of the boats can be a slow process, which is not conducive to short meetings.

Despite the apparent lack of market activity (or because of it?), there was a positive attitude towards, and increased awareness of, business transformation and the need to adapt to changes in the market and a realisation from many attendees that now is a time to reflect and invest in an improvement to systems and the use of data.

What were the hot topics?

We haven’t created a word cloud based on everything written about MIPIM, but if we did, it is easy to imagine that “ESG” and associated words, would be dominant as it was the topic that seemed to be part of most conversations over the four days, even if it was not always clear what the implications of ESG are for investors and asset/property managers.

This was not surprising for an event which began with a keynote speech by Jeremy Rifkin, the American economic and social theorist, who outlined a vision for a sustainable future for the planet with the real estate industry leading the way. To reflect this, MIPIM even had its own “Road to Zero” zone within the Palais des Festivals. Disappointingly, it was situated on the lower ground floor (which has no windows or natural light), and except for the seminar area, the Zone was almost deserted on the occasions we visited. Perhaps the sunny weather led attendees to prioritise other conference areas.

Data was also a major focus at the conference, with Avison Young and CoStar both emphasising its importance. A demonstration of Loopnet (which was relaunched by Costar in November) revealed how it provides data-driven predictive insights into the property decision-making process of occupiers. Clever stuff.

Elsewhere in the exhibition, MRI was promoting its Springboard offering. While being well known for its work on footfall in the retail sector, the platform is looking to move into the wider built environment and other workplace situations.

A further interesting development was the number of firms at MIPIM who were sharing ideas on monetising property/building data outside the property industry.

There were many new customer/tenant portals appearing on the scene from all over Europe. This raises the question; how many are needed and is the market now saturated? Equiem, one of the most established in the market, has now dropped its on-site resourcing model and is focusing on its robust software, which is popular and widely used in Australia, Europe, and the UK. Talking of technology, along with videos of major developments in the desert, we were drawn to the Saudi Arabian pavilion at MIPIM showcasing a rather creepy female robot called Sarah who reacted to your voice with all the warmth of a cyborg in a dystopian sci-fi film. It was, nonetheless, an interesting addition to the conference and showed that the industry is always looking for new and innovative ways to approach real estate development.

“Sarah” the robot.

Will we be back in 2024? Of course. Where else are you going to run into so many major investors, property developers, asset managers, brokers, property managers and technology providers in such a short period of time?

Oh, yes. And Dengue Fever. One of our team tried to give blood on their return to the UK, but it was refused! Why? Because Cannes is in an area apparently afflicted by this disease.

Who knew?