Facility Management- Key to running a successful mall
Facility Management has become an integral part of the retail ecosystem but a decade ago it was just limited to a very few basic amenities, but with professional facility managers coming into the scene, the retail realty sector has seen a sea change in the number of support services, which are provided to the customers. With fierce competition in the industry and with little differentiation with brand mix in the shopping centres, malls have come up with newer ways to increase the footfall. Of this developing and adding facility management services is one of the important aspects. The wide array of support services act as a backbone in initiating customer connect and in turn resulting in better customer retention.
Property and Asset Management occupies an important role in the development, delivery, and management of basic and integrated real estate projects. The continuous rise of occupier aspirations is the primary factor driving the demand for management practices as a unifying platform for new age real estate development. Facility management services are the first experiential thing as they are the first point of contact for any mall visitor. The services incorporate parking, security, house-keeping, medical assistance, wi-fi, baby-care and many more. The quality of support services has a direct bearing on the happiness and leisure of the customers. It acts as a backbone upon which a consumer gets a wholesome experience.
“Rising occupier expectations can be attributed to two main trends. On the institutional demand side, the requirements of large national/multinational corporate occupiers and investors have redefined expectations for built space quality and its management. On the other hand, constantly maturing and discerning individual consumers of homes, retail and entertainment has ensured that high-quality real estate products go hand-in-hand with equally competent facilities management,” says, Charu Thapar Chakravarti, Managing Director – Property and Asset Management, JLL India.
Adding further, Chakravarti, says, “Today, the corporate, investor, and individual consumer is astute and aware of their requirements, and about the value addition they get from every service, including real estate. Hence, it is not surprising that in India as much as globally, world-class real estate must go in tandem with world-class management service.”
Evolution of Facility Management
FM is no longer seen as a quick fix team and has gained serious prominence in the real estate domain, not sparing Retail sector as a segment. With FM being all about people, more & more professional outlook and governance has come up into the business, and is seen as a more strategic enabler for enhancing the overall experience of consumers. With touch points at multiple levels across different stake holding levels, FM as become an integral part of any design be it setting up of mall or high street business.
Talking about the evolution of facility management services, Rajesh Shetty, Senior National Director, Facilities Management at Colliers International India, says, “The gamut of services covered has swollen beyond the conventional housekeeping, security, & engineering services. With various logistics support also required, this now encompasses event management / coordination, customer interface – relationship, staffing for managing the moves & various logistics supports the business demands.”
The industry is a sunrise sector and the opportunities to move up the value chain in organisations are immense. The key drivers to enhance building management services going forward will be availability of skilled resources through more training facilities and the ability of all stakeholders to understand the costs associated with the services and work jointly in optimizing, rather than merely reducing costs to achieve better services.
Reiterating the statement, Rajesh Pandit, Managing Director, Global Workplace Solutions & Asset Services, CBRE, says, “Facility management services are an integral part of the commercial real estate business, and play a critical role in enhancing the overall efficiency of any standard business establishment. During the years of its rapid economic growth, commercial realty in India reached global standards of construction and delivery; and with management teams being exposed to the best environments around the world, Indian office spaces too followed suit. Over the last decade or so, an integrated approach to managing spaces and facilities has also begun to gain significance with the emergence of thisglobal commercial landscape and changing business environment.”
Contributing to mall’s success
Mall business is not just about brands and products, it is an overall experience that needs to cater to diverse groups with varied requirements, with the challenge of ensuring all groups get to all of it under one roof!.
“To make the services & experiences holistic, every touch point starting from access to the place to exiting the building has to be thought through ensuring seamless transition from one event to another within the mall environment,” says, Shetty.
Further adding Shetty, says, “Every malls are going beyond the brief of the designs prescribed today! Besides the routine integration of various services within the built environment, improvements in operational aspects be it the work flow or optimisation of resources, doing more for less is the demand, as time is seen as the key factor impacting the overall experience of mall users.”
Talking about the importance of FM in context to Retail Realty, Pandit, says, “In the Indian context, the most important services that are critical for the success of a mall are promotions and events services to attract customers and increase foot falls. Customer facing services such as security, Housekeeping etc. Customers expect a very high level of hygiene due to increased awareness levels. A safe and secure environment is also essential, especially for high end, luxury malls. Customer engagement through kiosks, customer service representatives, mobility assistance for elderly etc also play a role in the perception of the Mall as a place to go with the family. Parking availability is critical, as is the ease of the process. Engineering Services while at the back end are crucial for the Mall’s success as customers expect an air conditioned, well lit and vibrant environment.”
Adding further, he says, “From a retailer point of view, proactive engagement by the Mall support teams, handling complaints in a timely manner and keeping operating costs low are the main expectations from the support services provider.”
“Until very recently, most Indian developers thought that mall management is merely another name for facilities management. The fact that these two concepts are different and that professional mall management has immense bearing on the long-term viability and success of a mall is gradually being accepted. A successful mall has to strike a fine balance in delivering returns for all stakeholders, i.e. good returns to the owners, high sales for the tenants and a great experience for customers. A professional mall management service not only help in effective management but also to bring significant savings up-front, other than helping real estate owners with zoning and leasing strategies in the future, opines, Chakravarti.
Delivering a good customer experience — like hotels, malls too have the ability to deliver a well-maintained, secure and clean environment. This is a basic requirement and is often ignored, having major impacts on long-term brand perception. If malls are to replace hotels in becoming meeting places, creating the right environment for customers is essential.
-Charu Thapar Chakravarti, Managing Director – Property and Asset Management, JLL India
How Shopping centres can remain valid in Omnichannel Era
– Rajesh Pandit, Managing Director, Global Workplace Solutions & Asset Services, CBRE
As the demand for modern spaces in India has risen, the quality of such environments has metamorphosed too. The ambience of Grade A commercial buildings today closely resemble that of star hospitality properties. The look and feel of top commercial buildings has attained prime importance in present-day India; and many such buildings have been refurbished and upgraded to meet these criteria.
· A sophisticated approach for a bustling shopping centre. Attracting a steady stream of visitors is vital for the success of a shopping centre.
· Shopping centre promotion. Effective marketing communication and positioning of the shopping centre, ensuring a recognisable identity, an inviting and friendly appeal and a successful rental experience.
· Technical management. Service Desk complaints management (24/7) long-term maintenance budgets, procurement and coordination of maintenance activities, service and maintenance contracts
· Financial management. Insight, certainty and confidence through expert debtor and creditor management, transparent financial reports, settling service costs, liquidity prognoses and VAT declarations.
Role of Technology in improving FM services
Technological advancements in building automation, growth in real estate with rising number commercial and residential projects, higher preference towards, safe and clean environment and professional conduct of services as well as competitive pressures have been significantly changing the market, and this creates immense scope for Facility Management organizations to partner with developers to provide custom made solutions which contributes in creating higher financial returns as well as service values for their properties.
Suggesting on the same, Pandit, says, “25 billion connected things will be in use by 2020 up from 4.9 billion in 2015. Smart buildings with lights, sensors, windows, HVAC units, doors and CCTV integrated into a network will be increasingly common. There is greater opportunity to enhance the end-user experience with convenient, tailored services. Gain more insights to drive efficiency manage costs – visitor numbers, meeting room use etc. Build smart buildings rather than trying to retro-fit.”
Technology has indeed taken over, and every related activity is coming under the radar. To derive consistency and save on time, automated parking, cashless transactions and high end cleaning equipment’s are getting introduced into the system.
– Rajesh Shetty, Senior National Director, Facilities Management at Colliers International India
“Tools are required to provide analytics that help make educated changes to assets based on actual data, as opposed to hypothesized ideas based on opinions. Transactional data is incredibly important for businesses because it helps them to expose variability and optimize their operations. By examining large amounts of data, it is possible to uncover hidden patterns and correlations. These patterns can create competitive advantages, and result in business benefits like more effective marketing and increased revenue,” states, Chakravarti.
Way ahead for FM in retail realty
Even though there have been quite a few examples of professionally managed malls in recent years, organized retail in India has a long way to go to achieve optimum mall management outsourcing.
Putting things in perspective, Chakravarti, says, “Currently, there are few designated mall management companies in India. Big retail chains and some large developers have set up their own mall management divisions that operate as their subsidiary companies. However, some developers such as DLF have entered into contractual agreements with professional mall managements firms to manage their malls. Historically, developers were managing their malls in-house that is expected to change going forward.”
|Research and consulting organization Frost & Sullivan predicts that by 2025 the global outsourced market in FM services will be worth $1 trillion, with bundled and integrated services accounting for 35 per cent of global revenues.|
Malls are public spaces where customers interact with the building facilities constantly. There is thus a very level of maintenance and up keep required to ensure that the quality of the customer experience does not drop as modern customers are very conscious about such aspects. While Mall developers have expertise and competence in setting up and operating the assets, specialized skill set and experience are required to maintain the mall and this is where professional outsourced service providers bring in value to the Mall operations. Since these firms have domain expertise in this area, they are able to enhance the life of the assets, reduce operating costs and improve service levels and hence outsourcing the facility management services is a win- win proposition for the developers. The acceptance of professional FM services is however not very high in the industry at the moment.
Sharing his perspective on the same, Pandit, says, “A few years ago cost management would have been the main impetus behind outsourcing real estate services, these days it’s as much about being able to free up in-house teams from the nuts and bolts of FM delivery, allowing them to deliver strategic value. In a fluid environment, where businesses can grow and shrink rapidly and often have a range of options when deciding where to locate, agility is important.”
Adapting global best practices
While there is a fair degree of understanding of the need for experts to manage the support services, the situation on the ground is that these services are managed by inhouse teams in most Malls. While the larger development are able to attract and train the staff in a professional manner or outsource the services to FM service providers resulting in a good service levels, majority of the mall owners do not look at support services as a key driver for increased foot falls.
Talking about the global best practices that should be deployed by Indian malls too, Chakravarti, says, “Rather than regarding brick & mortar and e-commerce as competitors, retail brands should realize the benefits of omni-channel integration, which helps in facilitating customer movement across channels. Increasingly, customers prefer to shop across multiple platforms, often combining mobile, online and brick & mortar. International trends highlight the important role physical stores play in driving – and benefiting from – online and mobile sales. More and more shoppers purchase items online and pick them up from stores; once there, they may buy additional items from the same store or adjacent ones, driving even higher overall sales than would have achieved through single-channel shopping.”
Trends for future:
Brick and mortar remains fundamental in retail, but with growth and integration of new channel choices, retail real estate owners must adapt their approaches to drawing customers. In this context, place-making is a way for retailers, landlords and developers to respond to the changing demands of an evolving customer base.
In her concluding remarks, Chakravarti, says, “Fundamental to any placemaking strategy is the creation of ‘places that people want to be’, so survey and dialogue with customers, in as great a sample number as possible, can provide clear direction and understanding in order to shape development strategy.”
“With technology already disrupting the way people commute & consume food, more introduction of technology is the only way for improvement in FM services, and more so in a mall or high street environment. Notwithstanding the limitation of lower return on investments on people, FM as a service is becoming an integral part of the consumer experience, and has bright future in retail business further on impacting every other segment of hospitality services, concludes, Shetty.”