Archilyse is Asking: How is the Real Estate Industry Standing up to
Interview with Jan Eckert, CEO Switzerland at JLL
In our new Archilyse interview series we are featuring personalities from the real estate industry every week. They are sharing insights on how they are dealing with the current corona situation.
With this interview series, we want to promote the exchange in the industry, and encourage all real estate players to stay strong during this challenging time.
1. In what ways were and are you – as a company – most affected by the Sars-Cov-2 outbreak (e.g. decline in orders, termination of operations, etc.)?
JLL has three key areas in Switzerland, which are affected as follows:
- The valuation mandates continue unchanged. Especially in uncertain times, this service is in high demand.
- In transaction management, most deals continue unchanged, at worst with slight delays. However, we are seeing slight hesitations regarding the launch of new transactions.
- We feel the effects the most regarding office space rental; the demand has abruptly decreased.
This has given us a certain balance in our earnings situation, which has so far enabled us to continue operations unchanged.
JLL is a global real estate service provider with offices on all continents, including areas where the disease was and is most widespread. On the positive side, the international exchange continues unchanged. However, one also immediately notices how badly the crisis is affecting people and the economy in other regions.
2. What measures (technical, organizational, customer-specific) have been taken in your company? What tips can you give others based on your experience?
Within a short time and even before the official lockdown, we switched to home office to protect our employees and help combat the spread of the disease. Fortunately, we had a functioning infrastructure so that no major adjustments were necessary. However, we have ensured that a different person in the office processes the mail on each day of the week, so that our operations are fully guaranteed.
It is important to us that we can provide our customers with the best possible support during this challenging period. We hope for an upswing in the second half of the year. To be able to perform at that time, we have asked our employees to draw their holiday credits on a pro-rata basis until the summer.
Besides, we inform our employees weekly about the latest developments in and around JLL. We also take the liberty of deploying employees outside of their defined job profile if a higher demand arises. However, this was already the case before the crisis.
3. What was your approach, e.g. did you think in different scenarios? Which sources of information or methodological approaches did you choose?
JLL has designed two scenarios to be prepared for the further course of business. In scenario A, a difficult 2nd and 3rd quarter are expected, followed by a moderate upswing in the 4th quarter and a subsequent stabilization in 2021. We are currently assuming this scenario.
In scenario B, difficult quarters 2 and 3 would be followed by an even worse Q4. An economic recovery would only be expected in Q2 2021. If the situation requires it, which we do not hope to do, we could switch from Scenario A to B and take the appropriate financial and operational measures.
4. Looking back on the last few weeks, what would you do differently today? What conclusions can you already draw from this?
I should have had my hair cut and my apartment cleaned before the lockdown.
5. Where do you see the greatest challenges or threats in the current situation? How do you deal with them?
The greatest challenge lies in the uncertainty about the further course of the crisis and the associated strategic and operational decisions: Which measures should be taken and when? Should the crisis last longer or even get worse, it can be devastating to wait any longer.
Conversely, switching too early to the survival mode of our scenario B could stifle a coming upswing. What would have been right can probably only be assessed in retrospect?
6. Are there any positive aspects you can draw from this crisis? What opportunities are there?
Many employees are currently able to spend more time with their families, although this can be a challenge in addition to their jobs. The helpfulness and motivation of our employees is certainly positive.
They try to do their best every day, and also manage to achieve success even in these difficult times. We hope that we will soon be able to celebrate their achievements together. As good as home office works for us, I will be pleased to have the personal contact again; and a meal in the restaurant (after a visit at the hairdresser).
7. Let’s travel into the past before the crisis – what tips would you give yourself from today’s perspective?
I think it’s still too early to give the right tips. I am making every effort to drive business activities forward and to keep a close eye on developments so that I can act quickly and appropriately. In doing so, I too will make mistakes, but hopefully they can be corrected.
8. Let’s travel into the future and think of April 2021 – What will have changed permanently as a result of this crisis?
While the acceptance of working remotely is likely to increase in some companies, I assume that certain travel restrictions will still have to be adhered to for the next year. For an international company like JLL, this means that instead of business trips, more and more conference calls and workshops will be held.
It is also to be expected that various companies will proactively simulate future crisis scenarios in theory. This could lead to an increase in the domestic production of components or building up a stock.
At best, attempts are also being made to replace positions of fixed costs with variable ones, either through corresponding employment or rental contracts, so that in the event of a future shock, the company can quickly switch to a cost-effective crisis mode.