Voice of the Occupier: Sally Marshall

Hosted by Adam Hoy, President of the CoreNet UK Chapter, this episode features a conversation with the new UK Chapter President, Sally Marshall of Turner & Townsend. Tune in to hear their thoughts on the pressing challenges facing occupiers in today's CRE landscape. 

Listen now to gain valuable insights and to stay ahead of the curve. 

#VoiceoftheOccupier #CREInsights #CoreNetGlobalUK

Thanks for listening. Follow us on LinkedIn and Instagram.

Thanks for listening. Follow us on LinkedIn and Instagram.

Transcript

 Welcome to the voice of the occupier, the podcasts from the UK chapter of cornet that dives deep into the world of commercial real estate from the perspective of those who truly inhabited. I'm your host, Adam Hoy, and I'll bring you insightful conversations with industry leaders, innovators, and visionaries.

Shedding light on the challenges and opportunities facing occupiers today. Let's get started. 

I'm really excited to have a special guest with us here today. My successor as president of the UK cornet chapter, Sally Marshall, Sally, welcome to the podcast. Thanks for having me. No, it's just some small shoes to step into.  You're going to do fantastic. Listen thanks for coming on the podcast today.

As we like to have conversations that our Occupier members can listen to and take some learnings from take some insights from so really excited to get your views today. today in terms of what's going on in the corporate real estate world. Excited to be here in 2025.

It's hard to believe we're halfway through the decade already. We think back and it seems like COVID was yesterday but we're five years away and we know a lot of our occupiers that's been a constant theme over the, the first part of this decade. And I think it's going to be interesting to see where we go.

Do we separate ourselves from the COVID years of the early 2020s and what the rest of the decade has. Has in store for us. So first question, Sally, I think one of the things that, that we look at in this podcast is we like to understand what challenges occupiers have and in your role at Turner and Thompson you have a a wider view in terms of what's going on in the industry.

So can you talk a little bit about some of the the biggest challenges you're seeing with your occupier clients right now? Yes, for sure. I think it's definitely challenging times out there, and there's probably three big challenges that we come across the most with Occupy clients at the moment.

And that's cost cutting underselling their scope three emissions and how that impacts their real estate. And then also probably the hardest one is balancing the C suite expectations with how people want to work now. So maybe I can go into a little bit more detail, with regards to cost cutting, we are seeing businesses is  Quite a lot of businesses are still growing and are still having the ambition to grow, but they want to grow with cheaper cost base rate, and actually we're seeing that play out within their real estate investments and it's a much bigger part of how they're thinking about their strategy. And it often means that and I don't know if you're seeing this Saddam, but sometimes real estate teams are more stretched than they used to be.

And actually that can impact the decision making speed as well of things as well. The other thing, that's. going to have an impact. We think still over the next year of come and years to come is the lack of skilled labor. And obviously that was very prevalent in the UK, but it's other very prevalent in other markets as well.

And actually in the UK, I think construction workers wages rose by 6. 5 percent the year it's set to September. So that means that construction, even though, inflation in some regions is lessening, construction is not going to get cheaper. So I think it's going to have lead to delays, reduce productivity and potentially operational bottlenecks.

So that cost cutting one is going to be a real struggle, I think for the next five years. I think the scope three emissions thing is interesting. It's something that most occupiers have now set some targets around, or if they haven't, that they are looking to it's a really hard one because, we've all got complex supply chains and trying to gather accurate data from all your suppliers is hard.

So I think working to set. use technology to set that baseline and then monitor progress. It is really important and something we are seeing more occupiers spend a lot more time on.  And then the third one, which again, I think is the hardest one. That'd be interesting to know what you think of this, Adam, and if this is playing out.

for you. But actually we are seeing across the industry and you see it in the press all the time, big statements coming out from C suites around returning to office. We've just had Elon Musk saying that it's no longer acceptable to work from home for huge swathes of the U. S. population. And then, but actually, That's very tricky because the real estate team is almost caught in the middle because not most people don't want to go back to the office five days a week, and they want to work in a highly flexible hybrid manner.

And I think actually we're Sometimes forgetting that pre COVID, like peak occupancy was around 60%. And I think that's almost being a bit forgotten sometimes. So I think that is probably the toughest challenge for real estate teams at the moment. Yeah. Yeah. Yeah. Thanks Sally. I think a lot of good info there and maybe to dive into a few things.

So the return to office for sure. I think you hit it 60%. What I was seeing was 55 to 60 percent pre COVID. And I think a lot of companies now from what I'm seeing are getting up closer to 50 percent, right? So if we're 45 to 50 now and we were 55 to 60 percent before COVID that could be the new equilibrium, right?

That could be where we're at. So I think what I see is there's a lot of companies changing the design. So going back to your first point around costs, right? And that's definitely something that we're always going to deal with in this industry. We know we're enabling functions within the companies that we support and we need to make sure that our cost bucket is competitive, right?

We can't we can't dominate a P and L cause we need to make sure that's the money is flowing to the business. So when you look at that what I'm seeing is a lot of companies focusing on quality. So it might be a slightly higher cost per square foot, but probably a lower cost per person if we're getting more people into less space.

And I think that, that seems to be the trend that I'm seeing. I think the Elon Musk's of the world and bosses that want people in five days a week, I think you're always going to have those, right? I think, one of the things that, that I took away from future focus back in October was the Deutsche bank comment around and I'm not going to get this perfect, but it was something like, remember that we are a bank, right?

So when you're, when your project team is working on a project, you need to remember what. type of company you are, right? So I always tell, teams that if you look at Google, right? So Google 10 years ago was everybody talked about Google space at conferences around, they had ball pits and slides and all kinds of crazy stuff. 

But if you would put that into a law firm, as an example, that would never work, right? So you need, when you're doing these projects and you're building space and fitting out offices, you need to remember what type of company you are and you need to design that space for the type of company that you are.

So there's going to be the Elon Musk companies, whether it's Twitter or Tesla or SpaceX, any of those that may be in five days a week. So the corporate real estate group there needs to fit out a space that works for, a hundred percent utilization if they get close to that, whatever it may be.

So I think it's never going to be a one size fits all. And that's definitely something that we'll need to work with our work, with our enterprises on as corporate real estate executives. I think the scope three, you nailed it. I think scope one and two in the sustainability world is relatively easy to identify and then put a plan together for, but it's definitely the scope three that's that is tough.

I think some companies are 90 percent plus of their emissions would be scope three. So that's definitely something as we look at the back half of this decade, that, that corporate real estate professionals are going to need to work on with their teams for sure. One of the things.

That we've talked about in this podcast. So you named a couple of things there demands from the C suite. So demands looking at employee experience and the cost element of it. So you always need to balance the two. So we've started to talk about. AI in some events that we've had recently utilizing new tools in, in, in the workplace.

Are you seeing clients of yours starting to look at different AI solutions and how has that come into the conversation recently? So I think we, yes, we are, but  nobody I would say has really nailed it. I think there's a lot of ideas. There's there's a lot, Of looking at AI, especially around how it can analyze the workplace data.

I think where people want to get to is a state where, there's a, you may have a meeting room that's booked at 11, but actually linking the AI systems up to the building management system. So that that meeting starts to get heated up an hour before. And I think that's, where everyone really wants to get to, but I've not seen any examples of anyone there yet.

I do think people are using it to help them predict the potential size of their workplace going forwards. And we are seeing that across Some of the larger corporate estates who have already implemented sensors across their portfolio. But it depends how far they are, along the first part of the tech journey to whether they are using AI in, in that way.

Yeah. Interesting. And it'll be interesting to see, events that we host, global cornet events, how much, Info starts to come out on how companies are using it. Case studies that we're going to start seeing around how companies are monetizing the use of AI. I think right now I'm seeing a lot of occupiers collect data, right?

Data, and we're putting all this data into the beginning of large language models, whether that's an internal language model or chat, GBT, or something that they can use externally, but it'll be interesting to see.  How you start cracking that, that equation of how you utilize the data to actually drive value for your enterprise.

It'll be interesting to see as we go into 25. Yeah. And I think an interesting challenge actually for corporate real estate teams, especially when they are procuring any consultancy services, contractors, facilities management, whatever it might be is actually figuring out how much AI is being used in proposals and how you can then, what do you then use to, to create the differential elements between those proposals as potentially they could start to get more and more similar if we're not careful.

Yeah, that's true. Yeah, I think as an occupier if I'm looking at a proposal, I definitely want to see the ideas come through around how we could utilize technology and new ways of working to positively impact my, my portfolio. So it'll be interesting to see what we get. Good.

I think, as we talk about the corporate real estate teams inside of occupiers over the years.  I think we've seen a growth in terms of what those groups are responsible for, which is a good thing. I think, in Cornett, we talk a lot about a seat at the table with upper management and making sure that we have a voice in terms of senior level decisions and company wide strategy.

And I think we've done a lot in terms of moving the industry forward to get us there. One of the things I'm seeing though, is I think groups like ours, corporate real estate groups tend to be a place where  different tasks go, right? If you can't figure out what to do in a site, the corporate real estate team, the facilities team, local facilities team usually does it.

And as I said, you work with a lot of different occupiers in your role. Can you give us some thoughts on what corporate real estate teams should stop doing to focus their activities and energy on more value add? Any thoughts in working with different clients? Yeah, and I think that's actually a really good point.

The amount of the length of job titles now where you see from corporate real estate occupiers and the different things that they've been added, had added to their bow as it were is amazing. It's getting longer and whether that might be they're responsible for travel now, or they're responsible for for the extra procurement duties, or it is definitely getting longer.

And sometimes, even having the sort of digital sustainability responsibilities chucked in there too, when you're not experts in all these things is definitely a challenge, I think, for people. I think there's a couple of things where I think that we see where we. Do you think that I think people should almost be stopping or reducing?

I think there's a lot of approvals processes across the board, which is still which were designed 1015 years ago and aren't. Really fit for that the needs of an agile occupier who potentially its requirements are changing much quicker than they used to. It's quite unusual now to sign up to a super long 20 year lease anymore.

So to have approvals processes that, that don't. Aren't agile enough to flex to the potentially faster pace that we need to work at doesn't really work. And then I think, again, it's around that strategy of the projects. And the strategy of where to spend the money and time and actually getting rid of those which are potentially low impact and not, Create not, contributing to the company's strategic goals and vision.

We still see projects which are based on a certain end users within a specific office, because they want that thing which obviously you're probably never going to fully away from, but if they don't align with the company's goals and vision, then we should be having those more difficult conversations, I think And I guess the one thing that I do think we should be doing more of, and I think some companies are, but it does seem to have fallen by the wayside a bit, and I is bringing back like proper capital planning.

And what I mean by that is we do see more and more now. And I guess this is slightly contradictive to my earlier point, but more and more of the budgets are Sometimes on a yearly basis and really for real estate portfolios that doesn't work right you can't we quite often get clients call us up at the last couple of months before the year and they want to change some furnitures in some office because they've got some budget to spend.

But that, doesn't necessarily add value to the company and align with their current strategic goals and objectives. So I think spending more time prioritizing and planning and allocating, as you were saying earlier, the budget well, and actually over probably more a three to five year period would have better impact.

Yeah. Yeah. I think a lot of really good insights there from a, from an occupier point of view,  it's hard to turn down. Additional work. And I think one of the things that, you know, especially if you look at portfolios where you may have smaller offices and the teams, the business units that may be based at those offices, you have people doing a variety of different things, right?

You might have your bigger offices where you have. Peer play facilities, people that are doing facilities work, you might have a smaller office where somebody is working on health and safety. They might be doing a little bit of the I T work. They're doing FM work. They might be doing some HR work. I think one of the things that I've seen is  if we continue to take and then we work into our group and we return value with it.

It continues to grow the brand and it ultimately helps the enterprise. So I think there's a balance between stretching the team too thin and making sure that you continue to add value within the enterprise. And I think there's no one size fits all. So it's something that you have to have to learn as you go.

I think one of the interesting things in doing some of these podcasts is that there are definitely, as you mentioned at the top, people are extending their their titles and a lot of different things coming in. So it's exciting to see, as we go to different Cornet global events and other industry events, talking with people, what's coming into the corporate real estate mix.

And I think there's a lot of people coming in from outside the corporate real estate. world, right? We see executives coming in with procurement backgrounds, HR backgrounds, finance backgrounds. And I think it's a good thing, right? It elevates what we do within the, within our companies and ultimately returns more value to the enterprise, which I think is a good thing. 

Sally, you've been a part of cornet for a while. We had the opportunity to work a number of years ago, looking after the occupier insight series within the UK. You're obviously a passionate member of the corporate real estate community. And we have a brilliant young leaders program within our chapter and. 

Globally within Cornet, there's the organization does a lot to look at people starting out in their careers and building skills and networking and really putting a foundation around young leaders to make sure that they can be successful. I'm interested in, your journey a little bit in terms of what you would say to somebody kind of coming into their career.

Why do you think corporate real estate, any aspect of it, why do you think it's a good career for people to step into?  Yeah, I think it's if you'd asked me what I was going to be doing When I first started out, I didn't think it was this. So I actually started out studying architecture and then working as a part one for almost four years.

And I think about 30 planning applications later and about a hundred bathroom elevations was when I realized that architecture wasn't for me, if I had to throw one more tile layout, I think  I was fully over that, but I do really think now a career in corporate real estate or construction in like really offers you the chance to create and manage the spaces where people live, work and play.

And actually there's something quite special around that. We spend a large proportion of our daily lives at work and with the people we work with. And so therefore the environments that you're in becomes even more important. And as you said, like the post COVID, there's Making those spaces more special to draw people back has been of increased importance.

So I think whether you're interested in design or like overseeing large scale projects or managing whole portfolios there's a, options for everybody. The industry isn't just about being on site anymore. And it isn't just about managing leases. There's much more to it there. Obviously the skilled trades people are really important, but you're really at the forefront of sustainable development.

You can be using some of the most cutting edge technology and helping to develop some of the most cutting edge technology out there all to build a better world. And I really like to think of us as In a small way of being the creators of happiness within the workplace. So I think it's a really exciting industry to be in, and the options within it are so much more vast than they were 15 years ago when I started to say  fully agree.

I think, you can look at it a couple of different ways, obviously from the occupier side of it the ability to work within a business, whatever the business might be, the. Corporate real estate group, you get a great view into what the business does and what is needed from a support perspective to make that business operate.

And I think just being there every day and, making the company move along, I think it's I'd say it used to be, and it's not quite there yet, but it used to be an undervalued role to to have the facility up and going to be in the right location to, to have, the cafeteria going every day, whatever it might be.

I think there's a lot more recognition for the industry post COVID, given the way that, that we adapted to that, a couple of year period where we had to put different limitations on the way that we operated and came through it. But there's something special about, Making, being the engine room of a company.

And I think there's a lot of pride that goes in that. And then I think the other side of it is, looking at our service provider side there's so many different options in terms of where you could, Where you could shape your career. It could be real estate. It could be facilities management.

It could be project management. We're getting a lot more sustainability expertise within service providers and within a service provider, you're part of a business and you could move up through the ranks of a core business and go into leadership positions. So I think the possibilities in the corporate real estate industry are almost endless.

I think the community is fantastic. It's grown over time, but. Yeah it's I think there's a lot of value in a long-term corporate real estate career. So thinking about that and looking at the UK chapter of Cornets I think we've had a phenomenal couple years.

I think the chapter has really developed over the last couple years in terms of the quality that. The quality of events that we're putting on the networking, the educational opportunities that we're putting on. We've got a great prediction and resolutions event coming up at the end of the month that I'm super excited about.

And I think that the group's done a nice job of really focusing on key events throughout the year, supplemented by a lot of great content by our brilliant young leaders group, the community groups that, that we have within. And I think it's I've been part of the chapter for a little over 10 years now.

And I can't remember a time where we were, producing so much quality, I would say. And maybe I'm biased, but I think we're at that point now. I think we can be biased. Yeah, there you go. I agree. But can you talk a little bit about maybe your thoughts on the chapter, your vision as we, start 25 off with that? 

Yeah, I think I'm really excited for this year, actually. And I  think what we've have done is collectively over the past few years is really set some longer term stress strategic goals for the chapter, which has meant that we're really, as you said, focusing on those relevant events, amazing venues and great speakers.

And really making it visible the wide diversity of our fantastic network. And making sure that we feature panelists who are, who offer, different perspectives and unique viewpoints. And that means not just getting speakers from the corporate real estate industry, but actually looking a bit outside that as well and see what we can learn from other industries.

One of the other things, you spoke about our young leaders network, Which is an awesome network to get involved in and they've got a really strong cohort of members, but I think I'd also like to spend a bit of time working with our executive and operating committee to create a bit of a space more for those senior professionals who might have different motivations and ambitions and make sure that we are continuing to help them learn and grow their networks.

And I guess further their careers regardless of where they are in the career journey. Looking forward to the challenge. Yeah. Yeah. I think you're right. Plenty of opportunity plenty of different points of value. I think we could bring to members at all points in their career.

And I think 25 is shaping up to be great. Like I've said before, I think the chapter has some phenomenal leaders now. And we've got a lot of people that really moved the chapter along, lean in and put a lot of time in. I think a lot of people don't realize the time that goes into helping shape the content.

So I'm excited about 25. Good. Sally, listen, thank you so much for being with us today. Excited to be here in 2025, excited for new year and what it has to offer and really excited to watch the chapter under your leadership this year. So thank you for being with us today. We really appreciate the time.

Great. Thanks for having me. And I'm sure I'll see you in a couple of weeks of predictions and resolutions. You will. Thank you, Sally. And thanks everyone. We'll be back soon with another episode of the voice of the occupier.