CBRE’s Martin Samworth: Transcending space
By Cecilia Chow
/ EdgeProp Singapore |
Beyond physical space, real estate advisers have to help create environments that draw people in – whether it is for a shopping centre, office, hotel or restaurant. “You can walk into a restaurant or bar and think, ‘I’m not sure I want to be here because it has no vibe’, or you can walk into one that’s buzzing and then struggle to get out,” says Martin Samworth, group president and CEO of advisory services for EMEA (Europe, Middle East and Africa) and Asia Pacific at CBRE. “We’re trying to create ones where people want to be in; that creates value in a holistic sense.”
Samworth: Clients don’t see borders and boundaries; they only see investment opportunities (Credit: Albert Chua/EdgeProp Singapore)
Having been in the real estate business for 36 years, Samworth continues to find it stimulating. “What I really enjoy about it is the fact that it draws on so many aspects of life and economics,” he says. Samworth, who is based in London, was in Singapore last month for the official launch of CBRE’s new 32,000 sq ft headquarters at Paya Lebar Quarter (PLQ).
Designed to showcase its vision of next-generation workplaces, CBRE’s premises at PLQ feature the property consultancy’s proprietary technology, such as “Floored”, to visualise and edit floor plans in 3D; Workplace 360, an approach to creating a variety of space settings that caters to different working needs; and a new mobile app, Host, which offers access to office amenities and services. “Host is the glue around the business to help make things more efficient and help people save time so that they are more productive,” he says.
‘Reference point’
Deploying technology and design, the workplace at PLQ is a “reference point” for CBRE’s corporate clients, whether it is for creating wellness components, design, fit-out or project management. “Our corporate clients are increasingly looking to reorganise their different teams or departments when their leases are up for renewal,” explains Samworth. “They want to know how they can create greater collaborative spaces; or new social spaces for hospitality, food and beverage offerings. All these things are becoming increasingly important in attracting and retaining key talent in the workplace.”
CBRE also intends to progressively roll out the Host app and the new co-working brand, Hana, says Samworth.
The workspace area at CBRE's new headquarters at Paya Lebar Quarter (Credit: CBRE)
Launched in late 2018 and operating as a wholly-owned subsidiary of CBRE, Hana was created to help building owners “develop and operate integrated scaleable, flexible workspaces”.
The first Hana co-working space opened in the middle of this year in the US, across three floors and more than 500,000 sq ft of Grade-A office space at the PwC Tower in Park District in Dallas, Texas. The fit-out and operating costs, as well as revenue, are shared between Hana and the building’s developers and co-owners, Metropolitan Life Insurance Co and Trammel Crow, a commercial real estate developer which is a subsidiary of CBRE.
This partnership model will be replicated across multiple locations in 25 markets over the next three to four years, according to Hana in a release in February. The second Hana co-working space is scheduled to open later this year at Park Place in Irvine, California.
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Beyond borders
After a global reorganisation last year, CBRE’s revenue and earnings were split along three business lines: advisory services, global workplace solutions and real estate investments. It was also then that Samworth was promoted to group president and CEO of advisory services for EMEA and Asia Pacific. The change took effect from Jan 1, 2019.
Art mural showcasing CBRE's proprietary mobile app, Host which offers access to office amenities and services (Credit: CBRE)
Samworth oversees the divisional presidents of Continental Europe, India, Southeast Asia, the Middle East & Africa, North Asia, Pacific and the UK. “One of the reasons why we’re expanding my responsibility into the Asia-Pacific and EMEA is to make sure that the two regions are absolutely connected,” says Samworth. “So, for major corporates that we’re already working for in EMEA, we can extend the relationship into Asia-Pacific. We’ve already done that for a number of companies.”
He adds: “We also see the flow of investment capital from Asia going the other way – from both local and international corporate clients.”
Asian outbound real estate investment had declined 36% y-o-y to US$53.8 billion ($73.2 billion) last year, but Singapore investors contributed about 40% or US$21.6 billion. “Singapore was the largest source of Asian capital in global real estate investments in 2018,” said Yvonne Siew, CBRE executive director of global capital markets, Asia Pacific, in a statement in March.
The top three countries for Singapore-based investors last year were: the US (US$6.4 billion), China (US$4.3 billion), and the UK (US$3.1 billion). The top three sectors they invested in were: industrial and logistics (US$7.7 billion), office (US$6.9 billion), and residential/multi-family (US$1.5 billion). The trend of Singapore investors exporting capital abroad is expected to continue in 2019, notes Siew.
“Clients don’t see borders and boundaries; they only see investment opportunities,” adds Samworth. Increasingly, corporate clients want just one service provider who can deliver the many different facets for their real estate issues. That is why CBRE has continued to broaden its offerings in facilities management and project management, with specialisation around retail, logistics, workplace environments, wellness or energy solutions, he says.
Singapore was the largest source of Asian capital in global real estate investments in 2018, according to CBRE (Credit: Albert Chua/EdgeProp Singapore)
Outsourcing, growth of GWS
Advisory services business is still the biggest contributor to CBRE’s fee revenue, having generated US$7.56 billion in FY2018 and US$1.6 billion in 1Q2019. The next biggest fee generator is global workplace solutions (GWS), which clocked US$2.74 billion and US$692 million in FY2018 and 1Q2019 respectively.
CBRE had acquired the GWS business from Johnson Controls in 2015 for US$1.48 billion, and it has become one of the fastest-growing revenue and earnings contributors for the past two years. GWS was also the biggest source of fee revenue in 1Q2019 at 28%, followed by advisory leasing services (26%), according to CBRE. Of the US$692 million in fees generated in 1Q2019, the US contributed US$302 million, with another US$319 million from EMEA and US$70 million from the Asia-Pacific.
“The outsourcing business is at an embryonic stage in a number of the markets, but it’s quite mature now in the US and in parts of Europe,” notes Samworth. “In many parts of the world, our key clients are still exploring how they can use our range of services and professional staff to deliver better services and at more efficient costs – whether it’s from a property management or facility management point of view. That’s going to be a trend that continues.”
Listed on the New York Stock Exchange, CBRE has a market capitalisation of US$17.57 billion as at July 9. It is considered the world’s biggest commercial real estate advisory firm in terms of revenue, which stood at US$21.34 billion as at FY2018. Among the US’ 500 largest public companies, CBRE’s ranking rose to 146th in 2019 from 207th last year.
The real estate advisory business has become increasingly sophisticated, notes Samworth. “We employ people from banking, and we have a lot of people in property management business who have an accounting background, understand the procurement business, the physical attributes of hotels, office buildings and shopping centres,” he continues. “Increasingly, we’re also creating environments that are fulfilling for our clients.”
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