JLL Perspectives podcast: Elastic buildings and adapting to the future of work

bout delivering a building in: 2032

Yeah. So it's and I think the it's a real build. And as we think about reporting and increase reporting requirements, it seems like a good framework to think about how that can help support our I love it before commercial real estate. I don't know if you know this about me, but I was in rainforest protection for like 6 or 7 years. I did not know that. Yeah, we even did a documentary with, Hugh Jackman and we want to award at the Tribeca Film Festival. Wow. Yeah. Because we, it was, funnily enough, what we were talking about before we started shooting. I changed my name to Toshi. But if you really want to know it, ask me offline, for anyone listening, but, we were an Australian startup that went to Singapore to protect about a million hectares of rainforest in Indonesia. Because we did a deal with governor one day. Yeah, because the whole point of that was to prevent deforestation of certain hectares of rainforest. Calculate how many carbon emissions you prevent from being released into the atmosphere, commercialize them into carbon credits, sell them to companies that, unfortunately, you know, couldn't afford the opportunity cost of changing the supply chain. So they were essentially, you know, paying to pollute. But at least all of that money would go back into protecting those forests, like paying for the ranges and all that kind of stuff. So we won't go to too much into that, because I know you're going to be speaking to Qatar, and I don't want to steal his thunder because he'll be asking you all these questions. But I've got a soft spot for all of this stuff. Yeah. You know, and we're always trying to figure out how can we ingrain sustainability even into flex and co-working and not to go off on a random random tangent. But before JLL, the co-working startup that I had to space, was born from a love for sustainability because it was turning restaurants into co-working spaces. So if they're already being rented out but only used in the evening, let's use them during the day. Yeah. Like, you know, repurpose that space. But I think flex I mean, I think the whole thing about success of sustainability is it doesn't sit over here. It's part of great business decisions. So that's where you think, you know, you think about flex. That is super sustainable. You see designing a fit out that lots of people can get it. You know, like that to me is like that's that's the winning formula. There's no point. Thinking about sustainability is something you add on at something that is a good business decision. So, it's and what the eco concierge is really prove to us is it's been a great way to engage. So it's definitely a conversation that more and more people are having. And what we're also finding is that conversations really progressing from just the writings and the numbers to things like social impact as well. And I think that's, as people that employ a lot of people in buildings, there's a lot that goes into it. There's so many avenues with, you know, social impact and that ability to amplify the impact if we can work as that collective. So work within our tenant partners, work within precincts, which is, really exciting thing as well. And if it means you get to have more conversations with your customer, and build that relationship, that creates an element of stickiness. It's perfect. Yeah. And especially when they're authentic, like, yes, you know, that's authenticity. Yeah. I think it's great having conversations that aren't born out of, oh, well, I should meet with you once a quarter. So here I go. Here's the tick box kind of exercise. But actually here's something we want to talk to you about. And when there's that genuine engagement it all becomes just super easy. And then people open up, they're like, hey, you know. And then, you know, you might have a knock on effect on another conversation or something that you need to connect with them. But it's it's much easier. You said you mentioned the, The Word Collective. Yeah. Another thing that you've said that stuck with me for a very long time when you were describing almost like, one of your perfect assets. Yeah. Is the power of the collective. Yeah. I was speaking to that. That blew my mind when you when you, spoke about that. I would love to talk about that. And feel free to shame me for butchering what I remember it to be, but I think it was. Imagine an asset where all the tenants could, like, not be. I don't know what the way to work together to achieve and not feel like the competitors. Yeah. You know, well, I think when you look at a lot of buildings, there's some really natural complements that tenants hit together. You know, a lawyer, a banker, an accountant, some other professional services. And you don't need to think about that. They're competitive, competing. I think there's a, a there's a few things. There's a sort of collective of being able to make those introductions, of being able to form those, I don't know, CEO roundtables, being able to have those discussions at the right level, that might lead to some great, you know, sort of business to business relationships. And I think that creates a different element of stickiness. If you can really get those mixes working well, I think there's also the love of the collective when we think about our precincts, when we if we thought about tonight or week next week, if we had every small enterprise trying to undertake a Nighthawk activation, with all due respect to small businesses, they probably would all do a pretty average job if we can collectively say, let us do the heavy lifting on Nighthawk. It's a really important record. Reconciliation weight for us. We really believe in it. We want to activate the pricing this way. We want to provide these. Then there's a real power in that collective of it being run really well, being able to execute it, with some expertise hopefully. So I think really being able to think about what can we do together. I love the power of collective. Years ago, I read a story of the I didn't listen to a podcast because that's not what I do. I read something that, you know, a group of, restaurants decided that collectively, they would do things like supply of onions and garlic and carrots and having one supplier do that was not ever going to set them apart. But it meant there was less waste. It meant that it was cheaper for them, meant supply chain was less wasted because it was just run one track delivering onions to ten shops, but where they would compete is on what their offering is, what their unique sort of selling point is. And I think thinking about that sometimes we put a competitive lens on too many things. Yeah. And if we think about actually what are the bits that we do need to act differently in versus actually when is the power in doing it a bit more to get that core? Because then you feel proud and you feel like you're part of something, right? Especially whether it's an asset or a precinct. And and that comes down to, not to, you know, commercialize that thought because it shouldn't be. But even as a landlord, there's an element of loyalty that I think that we've borne out of that. Yeah. Because again, it's a way to authentically engage and those that want to it sounds like the perfect kind of tenant mix to me. If you can do things like that. Yes. Just spitballing. Random ideas. Now, it could be as crazy as, oh, hey, can everyone pitch in a certain amount of outgoings? Like even if it's an extra park or something? Yeah, for a dollar so that it can fund a certain amount of NLA or space for not for profit or something with the building. And especially if there's a sort of view that's shared around a the benefit of not for profit. And then if you share a specific passion for that one not for profit. Yeah. Yeah, absolutely. And it feels like you're, you're part of something. You're doing good. And it's something that it's not just some random, okay, we're going to do good for the sake of it. Yeah. You're almost part of that journey. Yeah. And then could you imagine. And again this is just a random idea. If that happens you fund that little space. Yeah. They grow as a business and then they actually become a tenant. Yeah. Because you know, even those businesses to a degree, flip the business model once they get to a certain scale to be for profit. Yeah. Because it funds and it's the most organic way to grow. Yeah. Suddenly becomes a tenant within the building in the wild, right? I mean, we've got a partnership with two good, which we've had for a while. And, that's growing and growing and, at Victoria cost, we're really excited that we're expanding that to include, them running our concierge service and also running a coffee shop, and that is a great way to talk about connection and community. I love, you know, too good a great organization. And I might butcher their line, but they sort of say we don't save anyone. We just actually give people the belief in saving themselves and that, you know, that giving someone employment, giving someone those opportunities is so good. And, you know, saying before, as the property industry is as land lease, we employ a lot of people to look after our buildings. So thinking about putting a social lens over that is is pretty, you know, pretty apparent and pretty powerful. If we do it together. Yeah. And from a from a co-working. It's funny. I'm trying to be careful when I say the word co-working and flex, because I'll bring that up shortly straight after this, because I feel like there's a split in the distinction happening. Yeah, in those terms in the market. But, throughout my whole kind of career within co-working, I was always a big element of even if you had 85% occupancy of your however many desks and offices, how can we accommodate, you know, whether it be university grants or that kind of stuff, you know, up and comers, not for profits within the space to kind of help contribute, not just from a space perspective, but from a mentorship. Yeah. So you might have a bunch of different experts within the space that's overlaid from the membership to kind of give them value and, and give them things. I'd love to kind of get your thoughts on if you were to put saying it in your next perfect building or precinct, an element of co-working and flex, aside from what we're used to, which is providing that swing space, and maybe it's a Trojan horse for a certain amount of amenities, is there something, as a modern landlord you expect from that, especially if it's a form of a partnership more then, you know, we'll just treat you as a tenant within that space. Yeah. I mean, I think landlord managed third space flex is much more where we're heading versus let's lease a few floors to co-working provider and say, you know, take a form on a RFP for a tenant. We've got flex. So say you'll be right. Because I think that really when there's a genuine partnership, it means that you have the same priorities around prioritizing your major tenants or prioritizing tenants that are coming in. So I think it's an interesting distinction when you sort of think co-working can be sort of a discrete, separate maybe operation. Yeah, that true flex and third space and amenity I think has to have some relationship with the owner. Yeah. And a bit of skin in the game to make sure that we're all aligned on, on where that works. So I definitely think those buildings of the future and those, you know, forward thinking buildings have a, a load more amenity, and a lot more space for people to be able to even think about. What don't they need to now putting their foot out? So it's at a town hall space. Is it a meeting room, I mean, even is it a kitchen? Like, how much can you centralize that within a, within a building to really think about what is then a sort of landlord base building off of that is then paid for on you. So that variable charge as you need it, it means you might take less space upstairs, but I think that space becomes more valuable to the tenant. It's super useful. And it's a it's a complement to the other space in the building that they can use and turn on and off as required. It's almost integrating into the DNA of the building. Right? Yeah. So so the distinction that I see and it's not me forcing it that the market's coming to their own terms co-working will always have a space within the industry because it's a great product offering. But it's more hey if if you want to run a large scale commercial business that's largely externally facing from the asset. So re renting space to, you know, a bunch of businesses outside so you can achieve a market rent and whatever, that's kind of co-working. Yeah. Flexes to your point I feel like it's more okay landlords really wanting to take more control over what it means for their tenants. There might be an element of slight third party external outreach to help commercialize it, but it really is for the tenant community. And then if you wanted the perfect kind of amount of flex or to what we were speaking to earlier, like drop in on modular spaces within the building, sometimes it's it's best not to just be in one area, even though operationally, ideally it's in one space so that you can have a certain head count looking after it. Yeah. But you'd want like certain areas scattered throughout the asset in the perfect building. Now take care of balcony space, rooftop ground floor, swing space. So that's the direction I think it's really going. And yeah, I think also when you look at like a super tall tower and we're, we're quite attached to a super tall, tall tower just to have all your flex space, say in levels one and two, when someone is maybe occupying level 50 or 60, it's quite a different experience. And so if that tenant on, you know, in those upper levels want to experience some amenities, they want it to be more similar to what they're paying rent on. So they want it to be, in their eyes, potentially very close to their eyes. So I think that's also important to not think that, you know, a tenant that's going to be attracted to the very top of a super tall tower is also going to be happy to swing for six months into level one space. You know, it could be quite different. So how do you. Yeah, those change over floors. I think if I got to get involved in a, in a development today, I would almost fight for the change of a floor. Yeah. If I was going to do some stuff. Not and unfortunately, you know, much of the time is and this is where you go down the co-working route, a co-working operator will be like, I want to be integrated on the ground floor. Yeah, the podium floors, more NLA get more economies of scale because I need to make as much money as possible. But if you think about it, what's the best for the building? Change. Right. Oh, and definitely think it's part of the secret sauce because it brings everyone together and then it's more tenant focused because, part of the reason why third party operators like to be on the ground floor is they get the street traffic. It's easier. It's externally facing, even if they have a cafe, they get that walk in traffic because they're trying to make more margin on it. But yeah, a change over floor. Plus you get views up there. Yeah. Yeah. It's really cool. Yeah. Well in my previous life I did work on a building, where we did put that in a change. I have a floor in Melbourne. Yeah. It's a great success. Like, beautiful. It's absolutely amazing. So, it's got a coffee shop up there. The tenants love it. I think it's been really well executed. So, Charlotte, you've walked through hundreds of buildings, surely in your career all over the world, like you were even alluding to one in the US earlier? Yeah. Is there one that really stands out? He was like the coolest or I look, I think I've got a little bit of recency bias in my answer here, but I was lucky enough to, do a bit of global, global study touring at the end of last year. I'm going to say the the new fit out for Macquarie in New York City's really outstanding. It has such a I mean it's in an older building. So there's some great adaptive reuse bit of love for sustainability there, but also just very, thoughtful, useful, usable. And, you know, you walk through an office space and you're like, I want to work here. Yeah. Not just because it's the Million Millionaire Factory, but actually the office space seemed like really cool. Some really great outdoor green space. But again, rather than it just being nice to look at, it was super functional. Wi-fi-enabled power shading. Thoughtfully, like some blankets or throw rugs. So just in case you're on those shoulder seasons, you can still use it. That use of greenery really coming through. And I think, you know, part of the success, it probably feels a bit more like home rather than like work is a great music room. The interior staircase just really works. Well. What's a music room? Well, you can go in there and have a jam session. There's like a piano and so cool. And it's soundproof and it's excellent. That's cool. Yeah, because I'm sure there's tons of, like, closet musicians in the office that you'd never know. Well, absolutely. I mean, there was generation where everyone was sort of made to learn the piano, and I mean, no one now filing and recording. Yeah. Like no one has a space in house.

Yeah. So that was really cool. And also the way they dealt with security, it was there. And they'll certainly areas you couldn't go into. But it wasn't this massive physical barricade. It was a bit more subtle. But I'm sure very effective. So that was always very impressive. And I think closer to home, even thinking about something like CBA Darling Quarter, they were well ahead of their time when they did that, in that in the first iteration of that, the kind of adopting so many advanced workplace principles. But then what's been really exciting in my new role is being able to go back now that they've done their next generation of refurbishment there and really thought about how do we reuse, what do we change, how do we make this really what's the next layer down for those listening that may not have been to that office of a really cool event, something that they did ahead of their time? Yeah. That building. So one of the things I did was bring everyone, everyone needed to come into the ground floor of their space. So that kind of need to come in, and then you go and go to various floors. Great permeability. So the ability to see a lot of different teams, I mean, they also did activity based working in the early days of adopting. And, you know, I still remember they everyone, you know, got great light laptops and all of those things that are those impediments that you don't quite right. Yeah. If you sort of say this is what we expect, but we're not going to make it super easy. And even going through the space again, post sort of that next refurbishment, it's sort of different stadium seating, certainly not in my mind, throwing it all out. It's about the thoughtful reuse. Yep. And making sure that it's to be right for the next generation. So cool. It's always nice to think that everywhere else in the world has sort of the greatest examples. But sometimes, you know, we've got to give ourselves credit. In Australia, there are some really advanced, customers and tenants out there that I really thought about this a long time ago. It's funny you say that because, like, since I work in an Asia-Pacific capacity, there's a lot of clients and, businesses in Asia that look to Australia as a thought leader. Yeah. You know, because there's a lot of cool stuff that's happening here. And even just listening to you describe the best buildings coming back again to like the theme of this conversation where it's almost functional and, you know, elasticity. It's not just this is a beautiful space, the thinking or the functionality piece. Oh, I really could use that, or I could use that or work there. It's more than just the functionality of the space, you know? It's more than just how it looks. It's the functionality. I think the functionalities. Yeah, it's, you know, it's absolutely key. And then if you can nail the soft things like the noise, the smell. Yeah. The music. Are you are you big on scented workspaces? I don't mind to scented workspace, but I am a bit fussy. Yeah, I like to be able to choose it. Yeah. Some I find a little bit overpowering. Yeah. I try and keep it consistent across. Yeah. But I do one of the, one of the reasons I like it in some spaces is that really it's another sense to make you stop and change. Right. So it's a lack of reset. I think in data spaces it's really important because that view of it's not I'm just not running from this meeting to that meeting to this meeting that now now I'm going into a quieter zone. Yeah. Okay. So that's sort of, I think another sensory cue that this is changing and maybe turn your mind to activate a different part of the thinking. That's a really good way to describe it because from my previous life doing co-working in hotels and restaurants, a sensory cue would be the music would get louder at 5 p.m.. Yeah, in the restaurant and by area. So if you were there working there like, oh, it's time for the laptops to close, go, go to happy hour, get a drink. Yeah. It's time to party. Yeah. You know, this is one more hundred. Cool. Thank you so much for the time that we worked. It went quickly. Went really quickly. Yeah. I'm going to send you some podcasts to listen to. Excellent. But I really appreciate it. I think a lot of people listening in don't don't get to speak to you about this kind of stuff. So it's fascinating, you know? Well, if anyone wants to speak to me more about it, let me know. Well, thanks for listening, everyone. Bye.