Driving synergy between real estate, IT and HR

Findings in the Top Locations In Asia: Tech report showed that the city-state’s strong score in socio-economic factors has helped to mitigate its relatively average score on the property metric.

In conjunction with the report’s launch in September, Colliers held an industry dialogue at WeWork’s space in Beach Road to discuss real estate market trends and key factors that weigh on occupiers’ decision-making process pertaining to office location.

Colliers editorial team caught up with one of the panelists - Mr. Sushil Kumar, Senior Director APAC for Real Estate & Workplace and IT at VMware Singapore – for his views on how location impact talent attraction and retention, as well as the challenges for real estate professionals in the years ahead.

1. What is your approach to assessing potential office location and their attributes?

Sushil: Broadly, there are two layers to this, one is at the enterprise level. When we are selecting a location, talent and diversity, and the ability to connect with the rest of the locations and ecosystem are all important. At another level, when you are selecting a submarket within a city, then the cost and the proximity to services and all the other social elements come into play. The criteria will differ as you go down the line of decision-making.

2. How big an influence does real estate have on talent attraction, and is real estate cost the key deciding factor?
Sushil: Real estate is highly relevant to talent attraction, even for a sales office. While I said location is driven by where the customers are - the proximity to customers - you are still looking at a prime location within the submarket. That means proximity to commute, proximity to food and beverage, safety, all other elements that are important to staff will need to come together. These are absolutely relevant in terms of location selection. 

Cost is definitely a driver within the choices you are looking at. You may not necessarily be looking at the most expensive location, but you could also compromise cost against some of the other value proposition. I would say real estate cost is a deciding factor between building selections, but not between location selections. 

3. Emerging markets versus developed markets – which tend to stand out more?
Sushil: If it is an engineering location, then emerging markets can absolutely come out and shine. Pune is a great example for us. Five years ago, we had a much smaller set up in Pune, we had only engineering. We have moved some of the shared services into Pune. We have done two consecutive expansions in Pune in the last three years - we are talking about a complete relocation at twice the size of what we were. Pune, for us, has been an emerging market. 

For India as a whole, we are debating should we go Chennai or Hyderabad. If you go to Hyderabad today, the key talent are converging in certain sectors, and we don’t mind going to an emerging market to grow the right talent. Currently, Bangalore is the largest location we have outside of our headquarters globally, and it continues to grow significantly. They have grown probably twice in the last five years and our projection is for it to grow twice in the next five years.

4. What are your plans in Singapore? Is an expansion on the cards too?
Sushil: We are about 400 plus people in Singapore right now and we continue to grow. We are looking to expand our office, we are having three floors now (at Suntec Tower 4), and will probably take a fourth floor next year.

5. As business needs and technology and talent trends evolve, real estate professionals like yourself have had to change the way they work. Tell us about this shift? 
Sushil: There is greater synergy between HR, IT and real estate. In a way, my role has expanded. The lines between those functions have blurred – that’s the first driver. What was at first HR’s role became my role as a real estate and workplace person as well. 

The second driver is the push for more collaborative work as opposed to working in silos. Let’s say hypothetically, if we were to move into a new office and went for activity-based work, then it is important for the IT department to remove the phones, because if you have a phone attached to every desk, then you cannot really have a real activity-based work setup. You want to tell people that you can work anywhere, then you need the technology to come in. Your HR policies should also enable that kind of collaborative work.

When we realised that we can drive synergies across functions was when we started to come together. We share not only our key programmes, we also share upfront our projects in the pipeline. So real estate projects are well-known by HR people, they participate in change management. If HR is, let’s say, rolling out a new recruitment tool, or bringing in a new way of how our goals at the enterprise level are going to be managed, then it is important for us to know because we need to enable the collaboration accordingly.

6. What would you say are some challenges and key considerations for real estate practitioners in next five to 10 years? How do you prepare for the future?
Sushil: I don’t consider myself preparing for the future, I am trying to cope and keep up with all the things that are going on around me. 

I think there are two main considerations: Agility and expectation for the business. When we talk about agility, it is not just about contracting and expanding, it is also about how technology and the way we are collaborating are changing within the workplace. The whole agility question is going to come up, considering the millennial workforce coming in. You have five generations working in the office and the sixth generation is about to enter the workforce – how is all that going to work together?

Business expectations are also evolving. In Asia, as we have seen in Colliers’ report, cities are continuing to inject new talent and enhance infrastructure. All that is making landlords very bullish, so companies may face some pressure from landlords who may not want to offer renewal rights, for example. Real estate professionals may find themselves caught in between these two contrasting demands: on one side a company’s need to be more agile and on the other, tighter lease and landlord’s demands.