“Tenant - Landlord partnerships. That is the new winning model.” - Matus Liptak - Executive Series #2

Matus Liptak is COO at HB Reavis, an international commercial real estate developer and asset manager currently managing 640.000 square meters of workspaces valued at 3 billion EUR.

Matus Liptak transitioned from a global role at IBM to shaping the future of commercial real estate at HB Reavis, where he harnesses technology to drive digital transformation and ESG innovation in the industry. Matus sees data as a core strategic priority, and is focussed on delivering client-centric strategies that position HB Reavis as a true partner for its clients., Sustainability is also a key priority, with the firm's achievements including the development of Worship Square, which sets benchmarks in sustainability and operational excellence. This GRI award winning building was not only constructed using net zero embodied carbon, but also operates with net zero carbon emissions.

Tune into this session to gain insights into the topics of data-driven office design, the hospitalisation of CRE, a new partnership model between landlords and tenants, how to achieve best-in-class buildings with net zero benchmarks, and adopting ESG principles across the entire value chain, and much more!


Interviews with inspiring Founders, Investors, and Real Estate Executives will be shared weekly on this podcast series - follow the PropTech Talks interview series and stay tuned!

Connect with me on LinkedIn: https://www.linkedin.com/in/matthew-maltzoff/

Transcript

00:00:01 Matthew
 OK. Welcome everybody to today's episode of PropTech Talks where we talk with real estate executives, investors, founders, discussing nuances in the industry today and how to capitalise on them. We've got Matus from HB Reavis today. I'm going to let Matus give us an introduction. Thank you for coming on.
 
 00:00:25 Matus Liptak
 Thank you very much, Matthew. Glad to be here. And yeah, I'm responsible for the operations. And HB Revis, we're a Pan European commercial real estate developer and asset manager. So we own, create and operate the buildings in our portfolio.
 
 00:00:46 Matthew
 So, so I mean, many in the industry today recognise that it's a little bit different to 5/10/15 years ago. How has your career sort of shifted with this, well, with the shifts that the industry is going through?
 
 00:01:04 Matus Liptak
 Yeah. So before even joining the real estate as an industry from I've been amazed how cyclical it is and how the trends are occurring in let's say in verge of decades and even the technological transformations kind of relief happens with a fairly long cycle if you compare it to other industries. And speaking of myself, I'm in real estate a little less under a decade. So I haven't seen, let's say, this huge transformational shift, even though this last decade was fairly dramatic from let's say the COVID era, the, the, the hybrid work, globalisation and all these major mega trends that have influenced the commercial real estate. And previously I was working in IT which actually helped me to be prepared for transformation.
 
 00:02:10 Matthew
 Understood. So I mean looking at the these megatrends today, it's, it's see it, it feels like the industry is finally going through it's, it's digital transformation. Would you say that's a fair assessment? And when you know, where do you think we are relative to other industries?
 
 00:02:33 Matus Liptak
 Absolutely. So I believe the digital transformation is essential for commercial real estate, especially for the the premium segment of it. But I see that this is gradually entering different asset classes as well. And the digital transformation has actually a broad impact on the way how not only the commercial real estate is operated, but also how it's designed and how it's constructed. And it touches multiple different facets of even people's lives through the overall well-being. But also digital enablement is also crucial to be able to comply with the highest ESG credentials, which are becoming also important. Not even the trends, but a prerequisite for the entire real estate sector.
 
 00:03:34 Matthew
 And I'm noticing another quite interesting trend. We have a lot of executives from tech companies or from other companies, they might be, you know, heads of IT or chief information officers that are now moving to real estate. I think this has started happening really, I guess in the right in the last five, maybe 10 years. And that seems to be playing quite a part. Now, I've done a little bit of research and I can see that you've, you know, you've were previously previously at IBM. What was that shift like? And you know what sort of things can real estate actually learn from large tech companies?
 
 00:04:22 Matus Liptak
 It was a wonderful journey. It was it was very surprising. So I, I thought that working in a global corporation across multiple countries in a global role will will actually help me to deal with literally any, any industry. But I was surprised how real estate is complex, how it's even neighbouring countries, how different they could be from a legislation perspective, the local market specifics, the local commercial demands. And it's extremely colourful and also extremely enriching to see how the, the, the complexity has multiple principles that can be worked around. I believe what was certainly for me a great advantage was the ability to work in a complex environment with the metric structure, being able to deal with multiple priorities at the same time, being able to prioritise where the where you need to focus 1st. And this job certainly can utilise you 24/7 and still you wouldn't probably tackle all the challenges, but determining what what is the right priority at the right time is probably very essential. And Matthew, the, the trend which you have mentioned in terms of IT people joining real estate, I believe real estate is becoming more and more dependent on data And it's, it had been very factual industry ever since. But I think now with the the verge of technological advancement with the digitalization and the, the overall amount of data that you can actually harvest from the buildings of, of this age, it helps you to also make very sophisticated decisions. And you can also deliver higher value to the clients, their employees and also you can operate the buildings much more effectively.

00:06:44 Matthew
The, the, the question I think arises when the you, the data collection that a lot of companies are getting very sophisticated that they data collection, but then, you know, frequent problem that arises. What does you know, what impact does this data have? How do you effectively utilise it? You know, do you see that sort of enabling data to maximise asset value to, to make decisions? Do you think this is, is really the, is really the problem to solve? Is this something that's already been solved? What? What's your take on that?

00:07:27 Matus Liptak
In in our environment, data is one of our core strategic priorities and I'll, I'll explain why. I believe companies within the sector can be even overwhelmed with the amount of data and determining what is the the important elements to look for, what conclusions is to be made out of it, is probably a challenge that has not been fully, fully tackled. And I think within the the premier real estate firms there are even large departments being created. There is a lot of efforts going into it. From our perspective, we've been able to really determine what is the data sets that is crucial for us both on the perspective on what is important for us as a company, but also what is important for us as a partner to our clients. We're no longer viewing ourselves as the landlords and our occupiers. We're viewing ourselves as a partner to the companies that have decided to use our projects to help. We, we are seeing ourselves as as enabler of of their workspace strategy and in order to do that we're able to provide lots of insights in terms of how their employees are utilising the premises. There is a tonne of use cases which of course we can talk about, which we can provide to our clients and we are exploring it further and further. From a data perspective, it's important to rely on completely accurate data. There's lots of imperfection. So even if we go to the ESG part, there are many buildings which have the energy metres still analogue where the people are walking around writing down the the metre readings. And this is room for a lot of errors, you know. So even going that deep to digitalize the the metre reading, so you are 100% relying on the data that you are seeing on your executive dashboards. That is another extremely essential point. So the data accuracy and also the right selection of the data points and.

 00:09:59 Matthew
 I mean, and there's so much to dig in on, on just that point in the 1st just listening, it sounds like we're not only going through a technological transformation, but but a people transformation as well, both in how we, you know, how landlords are now interfacing with clients. It's now more of a consumer centric product for real estate. That's a huge shift because it really was, you know, buy some land. Good luck. You know, and now it's, you know, having, having that two way dialogue with an occupier is a, it seems to be a huge shift, but same externally with clients, but also internally. That's what I'm gathering. The other, the other thing that you know, to touch on, I think we should explore a little bit. You mentioned the, the ESG component, the decarbonization component and it's, it's often understood that you need a level of data to even undertake the decarbonisation strategy. How how you know that that of course is a a complex problem with many regulations that are moving asset managers in a in a multitude of directions. How might an asset manager or or landlord or portfolio owner start to tackle the decarbonization issue?
 
 00:11:21 Matus Liptak
 It's a great question. The decarbonization journey is also something that has impact across the entire company. So it's not enough to establish your ESG team and expect that you'll be producing ESG materials on your website, but it's, it truly touches everyone in the operations. And you've mentioned that the shift of even this shift has even personal impact on the job positions and ESG is also one of it. So it requires that the facility managers understands the the key principles why it is important to implement certain set of routines. It is very important for the building managers to have reasonable understanding of the ESG targets on both corporate and legislative basis. It is extremely important to understand the ESG objectives of our tenants, of our clients. Many of our companies are Fortune 500 companies and they have very sophisticated environmental and sustainability targets where we as a real estate operator can strongly contribute to. And again, it's and you can also select 2 routes. So there are companies which have gone this, let's say greenwashing marketing way. So you can do a lot in terms of producing materials and offsetting and finding ways how to interpret the reporting or you can go very deep and being able to provide hard data evidence that we you truly are managing a carbon neutral building like we are in London. We're being extremely proud that we have this year even received the GRI award for Worship Square, which is not only the 0 embodied carbon within the construction, but also one of few net 0 carbon in operation building across Europe.
 
 00:13:40 Matthew
 Let's talk about Worship Square. I'm glad you brought it up. It's, it's, I mean, we're, we're based in London at the moment. We're actually very close to Shoreditch. We're in Spittlefields. You know, I'd love to learn what can, what can other developers and asset owners learn from, you know, and a retrofit is a big consideration to, and there are still new builds that have net zero goals. What can other asset managers and developers learn from Worships Worship Square? How can they strive to achieve similar, you know similar net 0 benchmarks that Worship Square has?
 
 00:14:26 Matus Liptak
 From my perspective, so the the the actual credentials of worship square are nearly at the level of a retrofit, right? So this is absolutely amazing. The key I would say is the fact that the principles have been adopted across the entire value chain of our organisation. So it was not our sustainability manager that was responsible for delivering it. It went across the entire development organisation, construction organisation, design, procurement and the entire entire, our own integrated supply chain works works to deliver on this, on this goal. And it's really requires even a tedious level of detail and also this principle on how you make the decisions. So where do you procure your steel? How do you accurate where from and and how you've calculated the carbon impact? And this is not something that the ESG team would be doing. It's really on the level of that particular procurement manager. The same thing how you run the logistics. So it really kind of transposes into every step and every decision that you make. So.
 
 00:15:48 Matthew
 You know, you, you mentioned it's, it's we're, we're shifting away from at least with an HHB Revis shifting away from it's sort of the sustainability manager's job, not my problem. And it's, you know, now something, you know, many stakeholders are, are striving towards how I mean that that seems like a operationally daunting shift, especially for some asset managers who are slightly earlier on, you know, down this decarbonisation journey to go through a, a cultural shift to, to get many stakeholders thinking about CRREM, EU taxonomy, different regulations and, and, and, and, and benchmarking their own KPIs against KPIs that can decarbonise portfolio. Getting that, you know, getting a whole organisation, you know, their heads around this kind of thing seems daunting. How? How does one go about it?
 
 00:16:54 Matus Liptak
 It truly has impact on the job specs across the the entire organisational structure. And like you've mentioned earlier, becoming a, a, a partner for the the clients within a commercial building requires a different set of skills from from people. And we have seen this even when with the initial start of digitalization, suddenly even the technical managers are not the people that are able to fix a certain technology with a screwdriver. Many times those people need to be a software engineers in order to really through a terminal of access the the software aspect of the particular technology. Now with ESG again it requires some little bit the different set of skills, but it's again goes back to the data to the to the fact to, to be able to determine what is actually important for us. How to ensure that we have the right source, right trusted source and that we are able to make the the right conclusions out of the data that we see. Both providing the insights that we need in order to operate the building, but also the data that we need to satisfy the needs of the EU taxonomy, GRESB etcetera, in order to be able to fulfil our ESG targets.
 
 00:18:27 Matthew
 And it, it, it seems that the direction of the industry is going even over the last five years, you know, the, the importance of adhering to these regulations is increasing, but there is also increasing clarity bit by bit, these regulations and, and, and how to undertake these, you know, this transformation. Where do you, where do you think the industry is actually going to be going in the next 5-10, fifteen years? You mentioned, you mentioned at the beginning of this podcast, these cycles. What do you think the next cycles are are looking like?
 
 00:19:06 Matus Liptak
 What we are starting to see already now is you know a shifting routines how people and individuals are utilising real estate. We see that the the the companies are real estate or or offices as as such is certainly something which is crucial for companies’ culture, atmosphere targets the sense of being even being human because it enables the human interaction which is crucial for the company's growth. And especially the the real estate class that focuses on the premier projects with the best locations and best possible amenities, best design. We see that. There is lots of movements towards truly central locations and even the best of the best buildings are utilised the most. And also the occupiers are now focusing on even more sophisticated fit out. And we see that there is lots of move towards even embedding elements of hospitality into office office segments that from a human interaction, where is this work life integration, the core office hours are no longer core office hours and people would like to use their time probably a little bit more freely and also to spent time in office in a in a various different ways. We see lots of people leveraging the events activities, you know, with not only, you know, social parts, but also focusing on mental health and health in general. So I see that real estate is moving or commercial real estate is moving towards even having a more important place in people's life.

00:21:26 Matthew
It's interesting because many smart building companies are almost invariably also incorporating workspace apps for the, you know, for occupiers, not just thinking about, we can improve your HVAC system, but really thinking about sort of the, the day-to-day workers and how they're, how they're interfacing with the building and, and getting the most out of it. Do you think that this is, this is really what the future of an office looks like? You know, we talked about sustainability, you know, underpinned by data. Do you think, you know, we're, we're seeing a shift in consumer behaviour as well. This is what this is just what real estate is going to be. And do you think we need to be prepared because we don't know what, what are your, what are your thoughts on, on really the future? And I suppose what would be your advice to executives at other asset managers, you know, given what we've discussed on this podcast?

00:22:26 Matus Liptak
I believe there are a couple of trends which are not, not the question of whether it will be becoming a new normal, but it's already known that yes, this is this is it. So the environmental and sustainability agenda is it is here and it it will not go away. The same thing applies for the well-being. You know, people want to feel good in in the premises and eventually they probably do not really care much about how many PPMs of CO2 you have within a meeting room, but they they simply want to breathe fresh air. They want to have a thermal comfort. And you know, this is something which again is not going to go away. It, it is expected that you will when entering an office building, you will feel very well and that it, it will enable you to collaborate that you will not be tired because you're breathing not not the fresh air. And also what will not go away is the hospitality services. So this shift towards relief, ensuring that the moment you enter the building, you've really feel that this sense of belonging that, yeah, this is a space where I want to spend most of my active day.

00:23:54 Matthew
So this I suppose to summarise, the advice to asset managers is to focus on quality and connect more with your consumers and of course you know the understanding that sustainability is not going away and this is all underpinned by data. Did I summarise? Do you think that's fairly?

00:24:13 Matus Liptak
I fully agree, Matthew. Yes.

00:24:15 Matthew
I'll ask fun final question and it's for another pretty large component of the audience, which are tech founders, entrepreneurs or even, you know, employees and a lot of these quite new technology companies. What would your your advice be to that side of the industry, the you know, the industry looking to support asset managers like HB Reavis and others? And how what what might your advice be for those companies to to be successful?

00:24:48 Matus Liptak
Not to be planning for perfection, but to be delivering everyday a better, slightly better service. And then perfection is inevitable.

 00:24:58 Matthew
 Fantastic mattress. It's been an absolute pleasure hosting you on this podcast today. For everybody who's listening, thank you very much for tuning in and I hope to see you all on the next one. Thank you.
 
 00:25:11 Matus Liptak
 Matus, likewise. Thank you very much.