Fa­cil­ity Man­age­ment- Key to Run­ning a Suc­cess­ful Mall

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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, Shubhra Saini finds that how 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, house­keep­ing, med­i­cal as­sis­tance, wi-fi, baby-care and many more.

“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. Talk­ing from the de­vel­op­ers per­spec­tive, Sid­dhartha Natu, As­so­ciate Vice Pres­i­dent, DLF Ltd

“From be­ing an un­or­gan­ised sec­tor to be­ing an or­gan­ised sec­tor, re­tail fa­cil­ity man­age­ment has come a long way. In the last 9-10 years, a large num­ber of Malls have come up where cus­tomer has be­come the king and the en­tire fa­cil­ity is built around the cus­tomers’ ex­pe­ri­ence. Dur­ing the process of de­sign, the pre­lim­i­nary points that are taken into con­sid­er­a­tion are the cus­tomers’ move­ment from the near­est con­nect­ing roads to the in­let of the mall, trac­ing the cus­tomers jour­ney in the mall and to the exit. A large amount of time, money and ef­fort is spent to make sure that the cus­tomer gets the de­sired con­ve­nience. In a run­ning mall,

su­perla­tive concierge; house­keep­ing and other soft ser­vices are nowa­days a norm and con­sid­ered as ne­ces­sity.”

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 and en­gi­neer­ing ser­vices. With var­i­ous lo­gis­tics sup­port also re­quired, this now en­com­passes event man­age­ment / co­or­di­na­tion, cus­tomer in­ter­face – re­la­tion­ship, staffing for man­ag­ing the moves and 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. Re­it­er­at­ing the sen­ti­ment, Natu, feels, “A po­ten­tial cus­tomer en­ters the mall not only for shop­ping but also for the en­tire ex­pe­ri­ence that the cus­tomer gets. Soft ser­vices like house­keep­ing, cus­tomer per­cep­tion of a safe and se­cure en­vi­ron­ment and the un­seen pa­ram­e­ters that keep the fa­cil­ity go­ing seam­lessly are key in con­tribut­ing to­wards the suc­cess of the mall.” 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.

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, Natu, says, “Fa­cil­i­ties in the fu­ture will be smarter than cur­rent. The trends will be to­wards adopt­ing more tech­nol­ogy to make the fa­cil­i­ties wel­com­ing. From car park­ing as­sis­tance as you en­ter, to apps that help you nav­i­gate and shop, build­ings are slated to be more en­ergy ef­fi­cient and green in the fu­ture. In In­dia, as the norms be­comem­ore strin­gent, the fa­cil­i­ties will be more cut­ting edge and seam­less.” “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.

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.

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

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

ex­pected to change go­ing for­ward.”

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.”

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

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.

ra­jesh pan­dit

charu thapar chakravarti

ra­jesh Shetty

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