According to Jason Leong, chief operations officer for Investa Office, the fund’s national tenant retention strategy is designed to work on several levels – sustainability, energy efficiency, waste and hopefully even make a start on turning around the industry-wide notorious practice of wasteful make good practices at the end of lease periods.
Investa Office on Monday launched the next phase of its tenant retention strategy that it hopes will also leverage improvements of improvement in sustainability in its office portfolio and tenancies.
The National Tenant Engagement Program, INSITE, combines a digital platform and portal for every building, with on-site programs that include fostering vertical communities, events, activities and education.
It also offers a range of time-saving services for tenants and their staff such as on-site or virtual concierge service. These include personal services such as key cutting, bike tube repair and organising dry cleaning that save workers from running errands in their lunch hours, and corporate services such as VIP meet-and-greets, airport transfers, organising meeting rooms and catering.
The digital portal also provides building-specific news and announcements, environmental performance data and has a social media element where tenants can post feedback, network, organise groups or fitness activities such as yoga, and be informed of special events and fundraising initiatives.
The program is being piloted in 11 Investa buildings nationally.
Jason Leong, chief operations officer for Investa Office told The Fifth Estate that the vertical community aspect in the company’s own premises had proved to be an advantage in improving sustainability.
The 126 Phillip St building VC program was developed in conjunction with City of Sydney, and incorporates a focus on improving recycling, energy-efficiency and the sustainability of fitouts.
Mr Leong said pointing out cost savings could be a strong argument for tenants to engage in energy efficiency. For instance building operating costs as a whole could be 10 to 15 per cent of a tenant’s energy cost lines – base building elements such as plant and lifts.
“So we are demonstrating that there is a direct tie between tenant energy efficiency and base building energy costs, which are on average between $18 and $20 per square metre of the total rent.”
Through green leases, tenants were also encouraged to partner with the landlord to manage aspects such as electricity and airconditioning use after hours to bring down the loads and therefore costs.
Different approaches were being explored.
If energy bills were only a small fraction of outgoines, the ESG (environmental social governance) argument could work.
“It’s the good corporate citizen approach, and we also explain that yes, you‘ll save on the bottom line also,” Mr Leong said.
Strong guidelines for service providers – all part of ESG
The fund requires all providers accessed through INSITE such as concierge services to adhere to quite stringent ESG guidelines.
Mr Leong said this is part of a broader ESG review of the fund’s supply chain. The fund recently examined all its cleaning and security subcontractors in terms of of fair pay and working conditions.
Next cab off the rank will be the materials supply chain, which Mr Leong describes as “a minefield”.
“It will be interesting after the first year to see what we can share [with tenants] from that review process,” he said.
“It’s all about greater transparency.”
Fitout, churn and flexibility
The fund has also undertaken a number of speculative fitouts for tenants designed to be flexible and reduce churn. Mr Leong said the fund was in discussions with furniture providers about leasing and amortising arrangements for fitout elements, where the cost can be built into the lease, and the furnishings removed and refreshed by the supplier when required.
This, he said, would reduce waste. It might also be possible for tenants to sell redundant fitout, potentially through the INSITE portal.
Surveys show tenants are interested
Investa general manager, marketing and communications Emily Lee-Waldao said tenant surveys have shown there is a strong interest in sustainability, both in terms of Investa’s own environmental, social and governance reporting and also more generally.
She said INSITE will createa forum where it is possible to communicate, engage and bring information on environmental, social and governance initiatives to the tenant community.
While it is an opt-in registration based system for tenants to access the full range of content and services, a good proportion of the information is available without registration and this includes building performance and sustainability.
The fund plans to use events at its buildings to promote the green message, such as a walk to work event that will include discussions around increasing the use of cyclist facilities and healthier eating.
The fund is a member of the Better Buildings Partnership and pro-active in promoting the sustainability conversation, an emphasis on green leases and including sustainability incentives or initiatives in the lease, such as energy-efficient lighting.
A project around recycling and waste is planned soon.
“It’s about having a platform to share those kinds of things. There is quite a strong social content,” Ms Lee-Waldao said.
The other motivation for the program has been increasing tenant loyalty and aiming for maximum retention of tenants.
Chief executive of Investa Office Campbell Hanan said the program was designed to enhance the value of the company’s role as owner and manager, “beyond running operationally and environmentally efficient buildings”.
“Senior decision makers who ultimately make the high value decisions on space, consider carefully how their office space will factor into their workplace strategy as a whole,” Mr Hanan said.
“Questions like, is the building aligned with our brand and where we are taking our business, is the space and management team flexible enough to meet our current and future needs, will the building foster a workplace environment where our people can thrive? These are the questions that have underpinned the development of this program.”