Why Investa is going long on wellness
Willow Aliento | 14 November 2017
Investa is spreading the wellness offering for tenants far beyond its WELL-certified properties, to A and B grade buildings, with the launch of a major tenant health and wellbeing program.
The initiative targets office workers in eight properties in Sydney, Melbourne and Perth, with a further 18 properties set to be involved next year.
The program has been designed in partnership with healthcare provider Bupa, and will be facilitated by Investa’s Equiem-driven Insite tenant engagement portal.
Tenants will be offered a mix of services, information and online tools to improve staff wellbeing, engagement and productivity.
Included will be heart health assessments, meditation classes, nutrition consultations, healthy cooking demonstrations and ergonomic screenings. There will also be information on managing stress, exercise, parenting and family health.
The program ranges from 567 Collins Street in Melbourne, which holds a WELL Gold Shell and Core rating, to older A grade and B grade properties that might only have a NABERS ratings.
Investa group executive Michael Cook told The Fifth Estate that including lower grade buildings in the program was part of the investment strategy for the Investa Office Fund.
While Investa’s unlisted ICPF fund investors look for the “trophy assets”, the listed fund is more focused on yield performance.
A “little building” can perform just as well in terms of yield as a trophy building, he said.
The strategy also recognises there is more value for the environment in acquiring an asset with a half a star NABERS rating and then taking it up to 4.5 Stars.
“We are adopting the same process with wellness,” Mr Cook said.
The big learning curve for the organisation currently is working out “what wellness actually is”, particularly given there has been quite a bit of spin generated around the concept.
The issues in Australia are also different to those in the US, where the WELL standard originated. In the US, “there are a lot of cheap and nasty buildings”, and mould and Legionnaires’ disease are two of the big issues. In Australia, however, the industry quickly got these two risks managed.
Once Investa is sure of what the wellness is, and what needs doing to ensure it, “we’ll dive on it and fix it.”
Wellness is new competitive pressure and owners need to get smart
Mr Cook said that with all the biggest owners including Mirvac, GPT and Dexus moving into the wellness space, it will lead to competitive pressure in terms of attracting and retaining tenants.
Where owners need to be smart is getting around tenant reluctance to pay for added wellness features, just as was the case with sustainability.
At the upper end of the market, tenants expect that if the they lease from one of the top six asset owners, the NABERS rating will be great.
“That’s what’s going to happen with wellness.
“Tenants will want to know they are in a building where that has been considered and dealt with.”
Some of the aspects of the program are around engaging with tenants – letting them know there are end of trip facilities, for example, so staff might want to go for a jog at lunchtime knowing they can shower afterwards.
“We point out to tenants all the things they can do to be healthy, wealthy and wise through the portal,” Mr Cook said.
“It is incumbent on us as responsible building owners to advise them of all the things they can and can’t do.
“A lot of it is commonsense – just like sustainability.”
While the company learned a lot from developing 567 Collins, Mr Cook said they had learned even more about wellness from a new development at 151 Clarence St, Sydney.
Hugh Irving, Investa’s development manager for 151 Collins, was part of a roundtable session at the International Well Building Institute in New York. One of the major topics that arose was what the WELL system could mean for existing buildings, and how it could be applied.
Mr Irving told The Fifth Estate that Investa would be participating in the new WELL pilot tool for existing buildings.
“Existing buildings have different issues.”
Mr Irving said the challenge for IWBI and its working group is to develop a tool that has integrity, but is also achievable. It can’t be too easy, nor too challenging.
He said the company’s interest in WELL arose 18 months ago as it recognised it had addressed the bigger problems around building sustainability in design and construction, and it was now time to think about the people in the buildings.
The company now incorporates WELL approaches as standard in base buildings, so that a rating can be obtained in the future.
He said many parts of the system align with Green Star. Other areas of focus at 151 Collins are air quality, water quality and mental health.
To manage microbes and mould risks in HVAC, for example, the development will be installing a UV-light germicidal irradiation device in mechanical plant, a technology that can also be retrofitted to existing plant and buildings.
An important driver for delivering wellness, he said, is the huge wave of millennials coming into the workforce. This demographic is “demanding” in terms of what it expects from workplaces.
The portal can assist tenants in meeting those demands. Many can be cost-effective, due to the economies of scale that can be achieved rolling the initiative out across the portfolio.
There are also operational aspects the company can address as the building manager, such as having no-smoking areas at building entry points.
According to Michael Cook, one of the key aspects of working to improve tenant wellness is about adding value to the tenant experience.
“Rent is expensive and it is only going to become more so, so we have to be able to explain why the building makes sense for more than just commercial reasons,” he said.
“That’s how we de-commoditise ourselves.”
The company is also continuing to learn more about the relationship between indoor environment quality and wellbeing through its ongoing partnership with University of Sydney’s IEQ lab.
It has placed SAMBA units in many of its buildings, including its own offices, to try and identify issues such as volatile organic compounds [VOCs] and carbon dioxide levels.
Mr Cook said that some of the things that have been learned from pursuing WELL ratings have also changed the way things are done from a management perspective. The new tenant program is an example, as it allows virtual retrofitting of elements of WELL, such as addressing fitness and nutrition, to older and existing properties.
“It’s like if you have a smart [facilities manager], you can increase the building’s NABERS rating considerably. The same will go for wellness.”
Changing the building from a “piece of concrete” to a community
Mr Cook said the program had emotional and social benefits.
Programs such as meditation classes, cooking displays and events build camaraderie in a building, Mr Cook said.
“It helps tenants get to know each other, and turns the building from being a piece of concrete into a community.
“[From my point of view] anything that attracts tenants to a building is a good thing.”
Sally Franklin, group executive, real estate services & business operations, said the new program gave Investa the potential to help “thousands of people be at their best inside and outside of work”.
“If this also contributes to boosting the performance of our tenant’s businesses, then this is a great outcome,” Ms Capp said.