30 April 2013 — Facilities management doesn’t sound that exciting. But it’s going to be the hottest job in the property sector.
Facilities management, otherwise known as FM, is about effective operational management of buildings and precincts. True, it doesn’t yet have the sexy status of fields like architecture and engineering. But that will change. Expect it to get a lot more focus as more companies confront sustainability.
Traditionally, facilities managers were supposed to contribute to the bottom line, not only by reducing facility costs, but also by improving the productivity, revenue generating capacity and image of their organisations. But all that has changed. Facility management is now also about managing carbon footprints, minimising waste and maximising energy efficiency. In terms of environmental management, it would have to be the most critical sector. That would explain why it has now turned into a major employer.
According to the Facilities Management Association of Australia, the sector contributes an estimated $20 billion to Australia’s GDP annually and employs in excess of 200,000 people. And it’s growing.
Facilities management is a complex field, focusing on the daily management of large commercial and public sector buildings ranging from suburban strip malls to the world’s tallest skyscrapers.
This puts them at the cutting edge of efforts to manage a changing environment. As long as buildings consume energy and produce emissions, facilities managers will be getting a lot of work.
Writing in the Public Infrastructure Bulletin, Greg Alley points out that a study conducted by the US Green Building Council found that commercial and industrial buildings are responsible for 30 to 40 per cent of energy consumption and atmospheric emissions, 60 per cent of all electricity use, 25 per cent of all water use, 35 to 40 per cent of the municipal solid waste stream and 25 to 30 per cent of all timber and construction materials.
This is why facilities managers are so important. They’re the ones who have to carefully select new materials, systems and designs when planning new construction projects or upgrading facilities projects. They also have to implement proactive maintenance strategies aimed at having facilities and equipment operating at maximum efficiency.
Not surprising that architecturally trained urban designer Matthew Trigg told The Fifth Estate that facilities management will be undergoing explosive growth in the next few years.
We’re already seeing it happening in Australian business. Companies like Colliers, Leighton Contractors, Brookfield Johnson Controls, a new entity merging Brookfield Multiplex Services and a division of Johnson Controls are leading the charge.
John McCormick, who heads up Brookfield Johnson Controls, told The Fifth Estate more businesses were now outsourcing their facilities management to his company and others including the market leader DTZ, which was merged with UGL but kept the DTZ name, and Jones Lang LaSalle, which is ranked number two in the FM sector.
McCormick says: “Companies just maintain status quo after the GFC and reduce numbers internally but now, rather than build up teams again, they’re looking to outsource. I certainly haven’t seen this much outsourcing for a number of years. It’s a bit of a boom”.
Sustainability, he says, is critical, particularly as it’s now attracting more interest from financial analysts.
“Occupiers are asking how they can utilise the space more efficiently: How do we get more productivity from greener spaces?,” he says. “Sustainability needs to be integrated right across what we do as an outsource provider. I think some parts of the market have expected it to come as a bolt-on, which is against my principles, because what a good facility manager does is sustainable. It needs to be part of what you do as an integrated service provider. So we have seen a lot of companies employ sustainability managers, but I think the focus of those people should be not to sell sustainability solutions to clients but to get sustainable practices across what you do, day to day, in the business. Making sure what you do with your clients is sustainable.”
They certainly have their work cut out. Michael Nolan, a principal consultant at property consulting firm Maunsell, says the big risks to buildings and facilities include increased frequency and intensity of extreme rainfall and wind. Coastal buildings and facilities, he says, are at risk from storm surges worsened by higher sea levels. Increases in bushfire frequency and intensity pose threats to buildings and structures, drier conditions lead to increased ground movement and changes in groundwater while higher temperatures and more solar radiation amplify degradation of materials.
The big risks for power and telecommunications infrastructure come from extreme storm events with the potential to damage transmission infrastructure. Increased wind and lightning can do all sorts of damage to transmission lines. Increased frequency and intensity of extreme wind, lightning and bushfires can cause significant damage to above-ground transmission lines and associated infrastructure while downpours can affecting access holes, pits and other underground telecommunications facilities.
For transport infrastructure, the main risks are more extreme rainfall damaging roads, rail lines, bridges, airports, ports and tunnels. Rail lines, bridges, airports and ports are susceptible to extreme winds, ports and coastal infrastructure are at risk from storm surges with sea level rises adding to the problem and increased ground movement and changes in groundwater can accelerate degradation of materials, structures and foundations. In addition, increased temperature and solar radiation can reduce the life of asphalt on road surfaces and airport tarmacs and higher temperatures can stress steel in bridges and rail tracks. Sea level rises can affect tunnels close to the coast.
There are many examples of sustainability-focused facilities management. One is at the MCG or Melbourne Cricket Ground, Australia’s most iconic sports stadiums and one of the world’s leading sports venues which hosted the 2006 Commonwealth Games, the 1956 Olympic Games, FIFA World Cup Qualifiers, the 1992 Cricket World Cup not to mention football and cricket. It is a massive ground. At 197,213 square metres, it can accommodate 100,000 spectators. Its record attendance was 121,696.
Facility managers at the MCG have introduced rigorous closed loop recycling programs, no small feat for a stadium that feeds more than 300,000 corporate hospitality customers and serves more than 4 million food and beverage products every year. Approximately 72 per cent of all waste there is recycled, the equivalent of approximately 97 tonnes of recycled waste, 48 tonnes of emitted carbon dioxide and 1.6 million litres of water. As an example of waste management, the largest contributor of non-recyclable waste found was the polystyrene beer cup. The solution? Replace the non-recyclable polystyrene beer cup with a recyclable closed loop PET beer cup. The MCG now recycles 100 per cent of this major waste contributor through the closed loop program. The stadium also makes use of rainwater capture, solar panels and other technologies that forward-looking companies are adopting. Or there’s Port Phillip Council installing solar panels at South Melbourne market, Sydney Water, a champion of sustainability, getting the facilities management contract from Thiess, the facilities management program at the Australian Technology Park Sydney which has reduced waste by 25 per cent, installed new lights which are consuming 60 per cent less electricity, built a 61 kiloWatt solar power generating facility and looking at the feasibility of rainwater capture and reuse and Southern Cross Care at Broken Hill installing a 150kW solar panel system brokered by the Solar Choice
It’s a trend happening around the world. In Britain, for example, CB Richard Ellis Group which provides a global facilities management team, has incorporated sustainability into its UK property valuations so as to develop a “green premium”. It’s done this by launching a six-point “sustainability checklist incorporating data on quality, accessibility, energy efficiency, flooding, waste and water efficiency – will initially target a statistically significant sample of 15,000 properties collectively worth $A150.6 billion”.
It is only a matter until we see that happening here. It means facilities managers will be the ones creating a premium for green buildings.
In the United States, Alcoa’s facilities managers have installed a titanium dioxide coating, called EcoClean, to the pre-painted aluminum surface of Alcoa’s Reynobond architectural panels. The coating works with natural sunlight. This sees it acting as a catalyst to break down organic pollutants on its surface and in the air around it into harmless matter, which is then washed away by rainwater. Alcoa claims that EcoClean has the smog removal power of approximately 80 trees, equivalent to offsetting the nitrogen oxide created by the pollution output of four cars per day. Regional utility Xcel Energy’s facilities managers have been working with Colorado State University to build a 5.3 megaWatt solar plant spanning 30 acres of the Foothills Campus, all part of a public private partnership. And Intel has expanded its use of green power from 88 per cent to 100 per cent of its total electricity use by purchasing 300 million kilowatt-hours (kWh) of green power.
Facilities management is a growing sector. The challenge will be finding people with the skills to do the job. It’s an area that requires specialised training and a keen skill set. While it’s not quite as high profile as other professions, it will be getting more attention as corporates embrace sustainability. It’s not yet sexy but it’s now become the one strategic lever that companies will have on profit, loss and sustainability. FM combines all three.
Leon Gettler is a freelance business journalist, author and podcaster. He works for a range of publications and produces two podcasts for RMIT every week: Talking Business and Talking Technology. He has an acute interest in the environment, its impact on business and the response of businesses and governments.