The challenges of being a facility manager in 2016 are becoming more and more significant but industry leader, Broll (part of the CBRE network) has seen success across South Africa and on the continent. Director: Technical Chris Aslett explains more…
In 2015, South Africa’s leading commercial property services company, Broll, was lauded for its work and received Gold for Facilities Excellence in the PMR Golden Arrow Award. This followed on from winning Bronze in 2014 and Gold in 2013.
The company was also recognised for excellence at the Euromoney Real Estate Awards 2015 where it was named as the number one Advisors and Consultants in Ghana, Nigeria and South Africa. Broll Ghana scooped three awards; overall Advisors and Consultants, Advisors and Consultants for Agency/Letting and Advisors and Consultants for Research. Broll Nigeria was named overall Advisors and Consultants, Advisors and Consultants for Agency/Letting and Advisors and Consultants for Research while Broll South Africa was named overall for Advisors and Consultants and Advisors and Consultants for Research.
And in 2016, Broll’s success has continued, despite the tough economic conditions, and the business is now looking for growth in new industry sectors. Director: Technical, Chris Aslett tells Enterprise Africa that Broll is targeting the healthcare industry and also looking to bolster its portfolio in the telecoms sector with a huge new customer.
“We are negotiating in SA and across our borders in Mozambique where we are looking at hospitals and that type of facility with regards to plans going forward and getting more involved with healthcare,” he says.
“We try and steer away from putting ourselves in a box as far as opportunities go. We’ll look at all sizes but our focus is private hospitals. State owned hospitals usually have in-house facilities management operations. When we get involved with state owned facilities, we usually go in as a consultant and they’ll ask us to form part of a task team or they’ll ask us for advice so our target facilities would be more in the private sector.
“The biggest focus at the moment, and for the next few months, will be the Vodafone tender.
“The first phase will be mainly focussed on South Africa with later stages focussing on Southern Africa. The long-term goal is to service Vodafone industry across Africa with very much the same principle that we have with MTN but this will be a global arrangement and for part of the bigger CBRE picture,” he adds.
Working on the continent is something that Broll is familiar with and has done for many years. In South Africa, the company is headquartered in Johannesburg but the group has offices all over the Africa including operations in Angola, Cameroon, Ghana, Indian Ocean Islands, Ivory Coast, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Uganda and Zambia and provides real estate services in other African countries. Right now, the African continent forms a major part of the Broll strategy and Aslett says that work with a large retailer has focussed the company’s attention in Africa.
“I would definitely say that Africa is a huge focus, especially with the latest success that we’ve had with the Massmart portfolio where we are now appointed as the facilities management company for Massmart Africa, working across the whole of Africa, in all countries on the Massmart portfolio – that is a massive job.
“We do have a big focus on the African market currently. There are African countries like Ivory Coast, Ghana, Nigeria, Kenya, Rwanda, Uganda to mention just a few where there is positive growth and where opportunities exist to develop an established footprint quite quickly,” he says.
However, even with the company’s success on the continent and its long-term success in South Africa, Broll has had to face some unique challenges that have been heightened thanks to the sluggish economy.
UNIQUE CHALLENGES
When the squeeze in the economy tightens thanks to fluctuating interest rates, depreciating currency and slowing demand for products and services, financial managers will sometimes tighten the belt and look at areas where they can save money.
“Unfortunately in our industry, the reality is that the first place that a CEO or COO looks to reduce expenditure is usually on the maintenance side; they try and push maintenance cycles and make it longer, repair work is put on the backburner, we are asked to perform miracles with regards to keeping machinery and equipment running for longer periods without huge expenditure so it’s a huge challenge and we do feel the pinch on the operational side,” admits Aslett.
Then there’s also the problem of smaller players being forced out of the market by the bleak economic climate. When people stop spending and the work dries up, small facilities management companies that are not set up to withstand economic pressure often fall out of the market, leaving their customers stuck. Aslett says that having smaller players enter the market for a short period of time and drop out when times get tough is harmful to the industry.
“My view, based on experience from various accounts that I’ve managed and been involved with over the last few years, is that it’s damaging to the facilities management industry,” he says. “The reason is that you get people that start up a company, they run for a few years and they land a few smaller opportunities that could have been developed into much larger portfolios but because of their lack of capacity they can’t do that. They then go under within three years and the legacy of that is that the industry does not know what they’re doing and those clients will very seldom return to the market and in a lot of cases the client decides to insource and do the job themselves. It’s hugely damaging and the result is very negative on the industry as a whole.”
A slow market place, where the economy isn’t thriving, also paves the way for smaller companies to install ultra-aggressive pricing and again this is not a positive thing for the industry and its reputation.
“The economy has been an influence and in our part of the world it’s worsened by conditions with the weakening of the Rand against the Euro and the US Dollar. It makes the net effect of the shrinking industry even more vivid meaning that opportunities are fewer and further between and fiercely competitive. It opens up the tendency for companies to go ‘cut throat’ which is also not conducive for long-term strategies and long-term relationships,” Aslett explains.
SAVINGS WHERE POSSIBLE
As Aslett mentions, CEOs and COOs quickly look to their facilities manager to make savings when economic activity slows. As well as saving on maintenance and repair work, there is also a demand to save on energy and this is not only to manage costs but also to help companies deal with issues such as load-shedding and black outs.
“We are continuously asked to look at areas for saving when it comes to energy usage and also utilities such as water. There’s a big drive on the go with regards to utility management. There’s been a lot of effort put into saving energy and I believe that we are very close to bottling out on those savings as most people have already installed the low-energy saving initiatives such as efficient lighting, efficient usage regimes and all that goes with reducing energy usage. There is light at the end of the tunnel as Eskom has a plan in place and they predict that in the next two to three years, there’ll be enough energy so that there’ll be no load-shedding.
“For the last six months, we’ve had very little power-outages so obviously something is going right but I hope that this doesn’t force our clients to lose focus on energy management possibilities,” he says.
Unfortunately, there is another big problem that has already impacted on a number of businesses in South Africa and that problem is water. The droughts have caused catastrophes and of course Broll is looking to help its clients where it can.
“We have a huge problem with regards to water. You cannot manufacture water and rainfall has considerably changed in the southern part of Africa. Uganda is currently going through a huge drought period, our central region is going through a massive drought season so water is becoming the next big crisis. The focus should be ‘how do we reserve, recover and re-use water that we have’ and that will be a focus for us with utilities management going forward,” the Director: Technical explains.
Of course, developing solutions to these problems and supporting clients who are themselves industry leaders means that you need to develop a quality workforce, and with around 400 employees in SA and around 1400 on the continent, Broll has managed to create a skilled and efficient workforce that offers quality service. Developing this base is an ongoing task and something which Broll takes very seriously.
PEOPLE DEVELOPMENT
The Broll Academy was established in 2002 with the specific aim of improving property skills and knowledge of Broll employees. The Academy offers skills development for existing staff and learnerships and internships for new employees.
“It’s actually a huge drive within the company and there’s huge support for development of that facility,” says Aslett. “It’s an accredited training facility and it has a national training qualification framework rating so the people that attend our training courses receive a NQF rated certificate when they successfully complete the course. It’s not just a certificate of attendance like you might get with seminars and lectures, it’s actually NQF rated and taken very seriously. We’ve got 23 people currently on training through that school and they do their practical work in the Broll workplace.”
Going through the Academy is the perfect route into a facilities management career and according to Aslett, there are opportunities for young people who excel to move into senior positions.
“The whole idea of having this set-up is to make that a reality,” he says. “There are employees who have gone through the academy who work in junior management positions such as technical managers and facilities mangers.
“There’s one other company that I know of that has a similar system but I don’t think they are NQF rated. There are a few private colleges which are affiliated with specific divisions, for example, our electrical engineering fraternity has their own training schools but they are training on the technical engineering side and not so much in our line of business which is facilities management and the management of property.”
The Academy takes people from varying different backgrounds, with different educational histories but Aslett explains that the most common entry point is through South Africa’s technical colleges.
“There’s a lot of ways into it but the most common way just now is through technical colleges. We find that people are sensitised at the technical college and then they come into our system and get earmarked for full-time employment,” he says.
INDUSTRY BACKING
The Broll Academy, and the wider activities of the company, are supported by the industry as creation of jobs and development of skilled people is only a good things for the sector. SAFMA (the South African Facilities Management Association) exists to support, represent and advance the cause and interests of the facilities management community on a sustainable and ever growing basis, and this organisation has for a long time supported Broll and vice-versa.
“We see the relationship as very important – so important that for the last eight years, we’ve been a platinum member which is the highest membership you can get from SAFMA. Our COO, Rowland Gurnell, is one of the Directors on the governing body of SAFMA. We take our membership very seriously. A lot of our employees at management and junior management level are also members of SAFMA so there’s a lot of benefit that we get out of the association and they get from us,” says Aslett.
“In 2015, we sponsored the SAFMA conference that was held in Midrand. We were one of the main sponsors and I think that shows our commitment to the organisation,” he adds.
The mission of SAFMA is to be a self-sustaining body recognised locally and internationally for its meaningful role in facilitating recognition of the South African facilities management community and Broll’s vision is to put clients’ needs first, solving their problems and identifying valuable opportunities to enhance their businesses so the two organisations are intertwined.
“SAFMA is the only registered organisation currently where we can get facilities managers registered and accredited. There’s a validation that takes place and the facilities managers submit thesis’s to SAFMA and they then get a ranking and that is nationally recognised – it’s not just a piece of paper, you can use it for further development and employment. It definitely benefits us, without any doubt.
“We are also affiliated with HEFMA (Higher Education Facilities Management Association of Southern Africa) and we are active member of this association which includes all of the universities,” says Aslett.
GROWING IN 2016 AND BEYOND
Following on from the success of 2015, Broll is aiming to continue on the success path throughout 2016. At the end of last year, the company announced that it had secured new property management contracts valued over R35 billion and buildings measuring over 1.7 million square metres. Group CEO, Malcolm Horne said: “We are thrilled by these new contracts – our landlord service businesses have shown growth across all regions on the continent in the last six months. Contracts secured will be taken up in the business over a phased period up to, and including April 2016. Our Africa business accounts for 23.3% of value and 12% of GLA.”
And that positivity is backed up by Aslett who says that the spread of work is good and there are huge opportunities for further growth with new and existing customers.
“In our experience, the growth is a balance between commercial and retail. For us, at the moment we have quite a few commercial banks that we are engaging with regarding long-term relationships but we also have the Massmart portfolio and in-between the whole mobile telephone industry.
“There’s a lot of growth in the portfolio. There’s the Vodafone portfolio and then there’s our retail group with the Massmart take on of the whole of Africa.
“We’ve entered into tender processes with a number of potential customers but they are currently in the open market and we haven’t had any definite response yet. We constantly partake in open tenders, recently we’ve submitted for some of the biggest banks in Africa and we’re constantly looking to expand our brand within the facilities management industry in the southern part of Africa but also in Africa as a whole,” he says.
Then there’s markets outside of Africa – other SA companies have realised the potential of global expansion, especially in the Middle East and Eastern Europe. Could Broll be the next SA business to become truly worldwide?
“There’s a lot of projects that CBRE is busy with and for some of those, the southern part of Africa is used as a springboard. Mauritius and Madagascar have projects underway and I do firmly believe that we can expand globally,” he concludes.