A growing tide of property companies from business park developer Arlington to the Duke of Westminster's property company Grosvenor are seeking to forge closer relationships with the occupiers of their estates through developing comprehensive service packages. Brixton is the first from the industrial property sector to take the plunge, launching its customer service company B-Serv last month.
'We are changing our approach completely to managing the estate,' says B-Serv managing director Steve Lee who joined Brixton from facilities management services provider Citex.
'If you get customer service right, and you deliver the right product, then you are ultimately going to deliver better value for both parties, he says.
Traditionally the property industry has treated tenants as, says Lee, 'not quite, but almost, a necessary nuisance'. 'That's probably overstating it, but certainly the traditional relationship has been to sign the tenant up for a long lease and then ignore them because there was no need to have a direct line to them.'
Under the B-Serv name, Brixton tenants will be offered a spectrum of services — from the most basic level, through enhanced lease obligation services to relocation, fit-out and even HR and IT.
Like Arlington, Grosvenor and the rest, Brixton hopes the availbility of such services will make tenants more likely to value the Brixton product and, hence, more likely to renew their contracts.
'At rock bottom, tenants are delighted to get a relationship with their major suppliers,' says Lee — something they should have anyway, he adds.
'If we can deliver really good level services to the tenant at optimum price then they are more likely to value their relationship overall and therefore we are more likely to retain those tenants in our properties in the longer term.'
Also, he says, if the relationship is good, any problems are more easily worked through.
Lee said the change was prompted after tenants began asking for additional services and Brixton saw the market changing.
We are changing our approach completely to managing the estate
Steve Lee
Brixton started looking at the issue about a year ago, working with Lee while he was still a director at Citex. In March this year Lee moved to work for Brixton and B-Serv.
'We recognised that we needed to have a new type of relationship with our tenants. At the end of the day they are our customers — this is not an attitude the property industry generally adopts.'
Part of the problem, says Lee, has been that the property industry is built around property as the asset rather than the customer: 'Property companies are valued on their asset bases, not on their earning bases and therefore it drives the whole thinking of the industry towards increasing their asset value.
'Our view is that we can add value by changing that thinking and by improving what we deliver to our tenants.'
B-Serv will offer three tiers of services. The first will be a better service contract, including security and maintenance required under the lease obligation. The second is a fuller package which can include further security and catering as well as fit-out and relocation services. A third level can include business support services such as HR and IT outsourcing. The company says it will use its buying power to get a good deal on the services, Lee said.
Part of the process will see the company reduce the number of suppliers it uses. At the moment Brixton employs 40 different security contractors across its portfolio. The plan is to cut this to two key partners within nine months.
In total, across the supply chain, suppliers will be cut from 300 down to between 15 and 20. Lee believes this will reduce fragmentation and ensure better responsiveness and best value.
Eventually other consumables, such as insurance, could be added to the package.
Brixton and B-Serv customers will be able to choose from the menu of services and pay for them either under their lease with Brixton, or enter into a separate agreement with B-Serv.
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Source
The Facilities Business