John Forrest flaunts 16 years of experience within the transactions, project management and facilities management disciplines among others. He now heads JLL’s Corporate Solutions arm with the largest market share in the region.
Forrest is a large man, stocky in stature and paramount in position. He exudes confidence that comes from managing and nurturing widespread relationships with some of the world’s most famous, lucrative and powerful companies in the world. And since he’s in regular contact with global behemoths, he can’t help but name-drop throughout the interview. He is currently CEO of Jones Lang LaSalles’s (JLL) Corporate Solutions in Asia Pacific. His knowledge of the corporate real estate realm is expansive and he peppers his descriptions with key shop-talk rhetoric. Forrest’s hometown is Sydney, and after working in New York he moved to Singapore in 1996 to set and cultivate business roots in 1998 and 1999 for the corporate solutions arm of JLL. In 2002 he usurped the role of MD which then morphed into CEO.
Corporate Solutions 101
“The life-cycle of space for an occupier is everything from business strategy to property strategy, transaction, lease administration, project management and facilities management” states Forrest. So his organisation has constructed an assembly line of end-to-end services, that is “then organised regionally around clients, versus the more traditional real estate services in the industry which is geography-centric,” he adds. While having branch offices in the region’s major hubs, JLL also operates regionally to frameworks. “We have 110 outsourced client relationships”, which he boasts is “double the market share of anyone else in this space” and spans 13 countries.
Like many consultancies JLL bundles services into one master agreement for single or multiple services across multiple geographies.” He mentions that he’s just met with Brian Duffy, Regional Head of Real Estate at JP Morgan Chase, “they’ve just appointed us to run all their facilities across Asia-Pacific”. A contract that previously belonged to competitor, Cushman & Wakefield. The official appointment took place in December and operations kick-started in February. “So 250 people from Cushman & Wakefield are transitioning around the region to JLL.”
But if the client, JP Morgan Chase, sought a different service provider because of unsatisfactory coverage, why would the new corporate solutions purveyor hire old blood? After answering and winning the RFP (Request for Proposals), JLL opened its doors to Cushman & Wakefield’s (C&W) employees working on that contract. Forrest explains: “the issue of service delivery is best described as a triangle – People, Processes and Systems. If you just have the ‘People’ piece, it doesn’t work because they need to have the technology that makes them efficient, that drives consistency, enables them to communicate and collaborate, and use best practices”. These roll off his tongue like a seasoned sales person rhyming off a catalogue of goods. “And you must have common processes which are adopted. Processes and systems are infrastructure which cost money. So you have to invest significantly to build the capability to run facilities consistently across the region. It just doesn’t happen by hiring a whole bunch of people and putting them on a contract and hoping they all do it the same way, and to a minimum standard in line with the contract.” In other words, it could be implied, C&W was missing
the infrastructure and the processes across the region.
The Outsourcing Wave
But how did the outsourcing ball first get rolling? How and why did the need develop? “Outsourcing is typically a cost-reduction strategy,” explains Forrest, “Basically they’ll say: ‘I want more services performed more effectively to create more value for my organisation’.” The theory behind it is, by hiring an agency to handle all its property needs, the client’s staff can focus on the core operations of the business. Bringing in a machine like JLL which either provides for services with its in-house team and approaches external vendors for specialised experience, in the case of sustainable and environmental issues, means more time to focus on business goals and growth. And this offering has proven to be a hot commodity. “We have 5,000 people across the region who work on the corporate solutions side, business is growing at 25 to 30 percent a year and it’s JLL’s fastest growing business globally.” The bulk of clients are American MNCs but Forrest registers more European corporates coming on scene in the last two to three years.
Corporates based in the Asia-pacific region are also jumping on board. “We’ve just signed a global mast partnership with ANZ Bank. We’ve had a long-standing relationship with them in Australia but because they have a new CEO who’s very focused on growing in Asia, Mike Smith, and they’ve acquired a lot of the Royal Bank of Scotland assets in Asia, he now has a much bigger Asian footprint.” He also goes onto talk about a large contract in Japan with Sanyo and another with DBS Bank in Singapore. More companies are expected to demand outsourced services in India, China and Japan in the next few years. In China’s case, the more they venture beyond their own territory, the more need will arise for external parties to orchestrate and manage their real estate interests since it’s a less familiar market. “Lenovo is a classic example. We have a partnering agreement with Lenovo, which is for all markets except China, where they’re headquartered.”
Behind the Scenes
Initial research on the need for outsourcing services began in 1999, which involved interviewing potential clients and delivering an in-house paper to invest heavily in growing this business. “As we built the capability, we won more and more clients. When we first went out and started to do this in 2001-2002 our major competitors at the time, who will remain nameless but you can guess who they are, were quite strong in their conviction that we had misread the market or that we were ahead of our time.” But now it appears JLL’s approach could be viewed as pioneering.
He asserts such an investment is a major feat, both in terms of time and cost. “We started building up our facilities management capabilities across the region ten years ago. We’re now up to 125 mil sqf”. In comparison, he estimates C&W has developed its service programme over the past five to six years. “JLL is a much larger company, a lot more scale in its business,” he adds, “it’s expensive! Transactional business is relatively easy to build”. With much less need for systems and technology, this type of operations generally requires market data of all the buildings in a portfolio: “what’s vacant, space… and a database of the occupiers? That’s not simple, but it’s relatively simple compared to the kind of systems you need to run a portfolio… with critical environments, retail branches, office space, financial reporting, payment of rent”. He underlines, “That’s a huge, complex thing to do. So you really need deep pockets to build the capability”. Obviously in touch with his customers, Forrest explains the impact of inadequate service. “When you’re a corporate guy, sitting on the client side, it drives you nuts if you’ve outsourced – with less control than you used to have and limited resources internally - and you have a service provider who doesn’t deliver consistently. Because then you’re constantly having to dip down to try and fix it”.
Rapid Repair
Most days are thankfully business as usual, but no system or structure is completely glitch-free. “We manage a lot of critical environments for our clients. If one of their critical facilities goes down, like a datacentre or a trading floor and it directly effects the business, that’s by far the most difficult situation. Systems do fail – they’re not perfect. The bigger issue is not that it’s going to happen at some point but how it’s handled, how it’s recovered.” When given a hypothetical scenario of a datacentre system failure, he says it usually takes seconds or minutes to repair. While he admits that these times can be very stressful, he divulges that such instances only occur every two or three years.
Major Challenges
He asserts the foremost challenge today is finding “enough of the right people with the right skills at the right time... so talent. There’s plenty of business right now in the market place. Our number one constraint to growth is enough of the right talent at the right place.” He goes on to explain that this encompasses attracting people at the graduate level, developing them fast enough and retaining them when they acquire experience. Managing different generations of professionals is one aspect. Generation Y is very demanding, he adds, “they want to grow very quickly whereas Generation X and baby boomers might be happy doing the same job function for two or three or four years before promotion. Generation Y’s are more likely to do a job for 12 months and then move on to the next thing”.
Reasons to Party
No doubt celebrated with spiked eggnog and a very merry office party, JLL landed its biggest outsourcing deal right before Christmas – Telstra – the Australian national telecommunications company. This translates into the management of 27mil sqf, “the largest thing that’s ever happened in the region by a long way,” enthuses Forrest. With unrelenting demand for corporate solutions in the region, Forrest will continue jetting from city to city, securing contracts and managing mega facilities with the semblance of ease.
