Corporate Real Estate Leaders
Converge on Budapest for
First Eastern European Summit

More than 260 top corporate real estate executives from Europe and elsewhere converged on Budapest for this year's CoreNet Global Fall Summit, 19-21 September 2004, and they weren't disappointed. From critically important content and professional education to thought leadership advancement and unprecedented opportunities for networking to special events in a beautiful, multifaceted city loaded with history while travelling fast toward the future, the Budapest Summit was, by all accounts, a success.

CoreNet Global Board members and staff attending the Budapest Summit are shown with founding members of the European Learning Leadership Council.

The official Summit Partner was CB Richard Ellis. Other sponsors included (in alphabetical order) Cisco Systems; Colliers CRE; Cushman & Wakefield Healey & Baker; Cyril Sweett; DTZ; Euromediterranee; HWF - Hamburg Business Development Corporation; Hewlett Packard; UK International Business Development; ITD Hungary - Hungarian Investment and Trade Development Agency; Johnson Controls; LandAmerica International Commercial Services; NAI; Nokia; palmOne; PECO - an Exelon Company; RMZ Corp.; SelectGreaterPhiladelphia; Steelcase, and Vipre.

On-site registration for the Summit opened Sunday afternoon. A welcome reception was held across the river on the portico of the Royal Palace of Hungary, where attendees enjoyed each others' company overlooking the Pest side of the Danube and a breathtaking panoramic view of the Hungarian Parliament, St. Stephen's Basilica and other historic sites.

The Summit began with breakfast at the four-star headquarters hotel, the InterContinental, on the Pest side of the Danube River directly across from the Royal Palace. Following breakfast, attendees heard from Leslie Whatley, chair of CoreNet Global and Senior Vice President, Global Real Estate & Client Services of JPMorgan Chase &Co., U.S. She summarized CoreNet Global's successes over the past two years since its creation and described a new level of services now available to European members of CoreNet Global.

“We have created a global platform that allows for the seamless delivery of learning – of products like our Executive Development Programme which are transportable from region to region,” Whatley told attendees. “Our members can now participate in these world-class seminars and earn the prestigious Masters of Corporate Real Estate designation from wherever they are.

“The Discovery Forum concept also continues to grow, bringing senior leaders from around the globe together for peer-to-peer, case-based learning that captures the most innovative practices in our profession . . . This year alone, we have held one in London and one in Frankfurt, and another is planned for later this year. It has become a regular feature on the European real estate professional’s calendar. The knowledge from our Discovery Forums around the world is disseminated through publications, Summit sessions, EDP and chapter programmes.

“Another area in which we continue to expand is in our Global Summits like this one, which convene the entire industry with unprecedented opportunities for learning, knowledge-sharing and networking,” she said, noting the development of a new programme, “the European Learning Leadership Council – a regional vehicle for addressing issues that are European in impact. The aim of the Learning Leadership Council is to provide a forum for the personal development of our industry’s leadership, the enhancement of their organizations and advancement of the CRE industry, through research and learning in a strategic fashion, within the context of current global and regional business issues.”

Whatley was followed by Ron Adam, Director of European Programmes for CoreNet Global who introduced the group to Corporate Real Estate 2010, CoreNet Global's major new research and leadership development initiative that is so big it is being unveiled over several Summits. CoreNet Global stages at least five global Summits every year: two in North America, at least one in Europe, one in Asia and one in Australia/New Zealand.

Adam presented the CoRE 2010 vision of the future and reviewed the key drivers leading change, including technology and glabalisation. He highlighted the implications of CoRE 2010 findings for CRE leaders relative to new business models and how a future network of CRE resources can participate, add value, and succeed in the networked world of 2010.

“The enterprise of 2010 is envisioned as a networked portfolio linking people, processes and technologies,” Adam said, summarizing the key findings. “A company’s physical space within this networked virtual organization must be gauged from a new, higher level perspective.”

The keynote address was delivered by Hans Martens, Chief Executive of the European Policy Centre. Martens discussed the aspirations and realities of the "new Europe" in the context of the global business environment and the challenges presented by the emerging powers of the developing world.

Martens explained to the group how the complex issues presented by the enlargement of the European Union include short-term opportunities, infrastructure challenges, corruption, competitiveness, and the importance of a holistic view of the region. In Hungary, for example, Martens noted, more than a decade ago true multinationals – primarily manufacturing entities – began launching operations that are now being transferred to Asia. The second wave of locators in Hungary now moving in are, by design, less labor-intensive and more service- and value-added oriented.

Following a break, the education programmes began, with four sessions running simultaneously and repeated in the afternoon. The sessions included:

• Distributed, diverse and dynamic: Global workforces and workplace strategies.
  Moderator: Ken Giannini, Principal, NBBJ Ltd. Speakers: Paul Harrington, Real Estate Director, PricewaterhouseCoopers; Ziona Strelitz, Director, ZZA Limited; Tony Thomson, Director of Strategy, DEGW PLC. The group discussed two case histories: PricewaterhouseCoopers' workplace strategies powered by research on employee aspirations while leveraging integrated infrastructure departments with work and lifestyle; and the new headquarters of the CSOB Group, a leading financial services firm and the focus of a major office project in Prague.

• New Models for Portfolio Optimisation and Asset Management.
  Moderator: Candace Fitzpatrick, Director Emeritus CRESA Partners. Speakers: Chris Kane, Head of Corporate Real Estate for BBC Realty; David Mirmelli, Director of Corporate Real Estate - Automotive Group/Europe, Johnson Controls; and John Suyker, Director of Property & Workplace Management - Controls Group/Europe for Johnson Controls. This programme had two very different companies sharing their strategies for achieving transformation of their respective approaches to portfolio optimization and asset management. For example, the BBC and Land Securities Trillium are involved in a multi-decade property outsourcing partnership covering asset transfer, property development, ongoing capital investment and estate strategy development. Johnson Controls, on the other hand, is motivated to significantly improve return on assets in its Automotive Group's outsourced manufacturing business. To do so, a new CRE process and support organization are being established to dispose of under-utilized assets and optimise both total cost of occupancy and strategic location objectives.

• Delivery Models Within and Beyond Europe.
  Moderator: Larry Matarazzi, director of Workplace Resources/EMEA, Sun Microsystems. Speakers: Barry Varcoe, head of Global Facilities & Logistics, Royal Bank of Scotland; Robert Wright, group head of workplace strategy, ABN AMRO; and Nigel Oseland, director of consulting, Swanke Hayden Connell. These two innovative financial services organizations shared their new models and the quantitative results delivered to their enterprises. Royal Bank has implemented a new operational model consisting of a collection of 20 interdependent initiatives that have transformed a traditional property-centric organization into one that is dynamic, flexible and business-centric. The aim, Varcoe said, is to move from “good to great,” using a model which includes a supply-chain management strategy featuring reverse auctioning on an unprecedented scale. With ABN AMRO, Wright described implementation of a coordinated space programme. The aim, which proved highly successful, was to combine strategic modeling, practical guidelines and mandatory procedures to deliver property solutions that realigned ineffective space and created greater worker functionality and productivity.

• Social, Environmental and Economic Responsibility around the World.
  Moderators: Nick Axford, Senior Director and Head of EMEA Research for CB Richard Ellis; Michael Creamer, Executive Managing Director of Client Solutions for Cushman & Wakefield Healey and Baker; and Francesca Hughes, European Director of Jones Lang LaSalle. Speakers: Tim Tourville, Director of Real Estate and Development, EMEA, Motorola; Johannes Ketel, Vice President, CRES, Deutsche Bank, and Juliet Filose, Global Real Estate General Manager for BP International Ltd. This group demonstrated how enterprises are increasingly being measured on social, environmental and economic performance – the Triple Bottom Line. The high-level findings of the CoRE 2010 report on Sustainability & Corporate Social Responsibility provided the context for these two case studies that presented a global corporate perspective on the subject. The upshot: the world is getting greener by the minute, and it’s a call to action for CRE.

Monday's General Session following lunch was a keynote address on "The Role of Corporate Real Estate in the Networked World". The session featured moderator Linda Demars, Director of Knowledge Networking for CoreNet Global, and speakers Mark Tamburro, VP, Workplace Resources; Bethany Davis, Global Workplace Strategy Manager; Robert Fitzgerald, Global e-CRE Manager and Peter Doran, Workplace Resources Director, EMEA – all members of Nokia's Workplace Resources team.

This team presentation and interactive panel discussion presented and explored key 2010 findings, examples of 2010 transformation at Nokia, and implications for corporate real estate professionals in Europe and around the world. The Nokia Workplace Resources team was featured in this session as a result of the conclusions of the eight independent CoRE 2010 research teams. For each research topic, interviews with Nokia confirmed key hypotheses and revealed innovative approaches for transition strategies that position the company for continued success in the networked world.

After a networking break, the four morning education programmes were repeated in the afternoon.

With just enough time to freshen up, the attendees gathered on modern European buses which whisked them off to the Museum of Fine Arts where, amid works by the Masters, the group enjoyed all the elements of an elegant reception before dining in the huge main hall on traditional Hungarian fare and famous wines of Hungary. This was accompanied by live music from a stringed quintet featuring a Hungarian cymbalist with a virtually unlimited repertoire which ranged from Hungarian and Russian folk songs to themes from film classics such as The Godfather and Casablanca.

The dinner included a short but fact-filled presentation by a representative of the Hungarian Investment and Trade Development Agency, sponsor of the event.

Three educational site tours started off the next day with something for everyone.

One tour was called Flexible New Environments that Help Virtual Networked Organisations Succeed. Attendees took advantage of this opportunity to visit IBM's call centre/shared service centre in City Gate showcasing the locations and work environment that many corporations are now choosing for back-office operations. The tour included a visit to the Science Park featuring discussion on lessons learned and the reasons for its success as the only 90 percent pre-let building in the market.

Another tour was called Turning Legacy into Opportunity: How Sustainable Location Strategies Produce Sustainable Communities. This tour visited the refurbished Dorottya Udvar, constructed in 1911 for garment manufacturing and now one of the best-known and office buildings in Budapest. Refurbished in accordance with internationally recognised standards for Class A offices in terms of space, comfort and technical provisions, Dorottya is widely recognised as one of the most beautiful landmarks in the city. This tour also included a visit to the historic YBL Palota. Built in 1869, it was the headquarters of the First Pest National Savings Bank and is now fully reconstructed as a mix of commercial office space and residential apartments.

The third tour was called Putting the Sustainable Future in the Context of a Sustainable History. A tour guide took the group to Parliament and Kossuth Lajos Square, where attendees viewed three award-winning buildings. From there, they visited the historic buildings on Szabadsag Square, passed through Hold St. Market and ended at St. Stephen's Basilica.

With all three tour groups returning to the InterContinental at the same time, education programmes resumed after a short break. The programmes included:

• A Sustainable Europe - What is the Corporate Role
  Moderator: John Weir, Real Estate Executive, BP International Ltd. Speakers: Paul Nathanail, EC FP 5 CABERNET Coordination Team & Director of Land Quality Management at the University of Nottingham; and Richard Spray, Head of Real Estate, Lafarge. This panel of practitioners from diverse backgrounds presented and discussed the issues inherent in sustainable development projects in Europe and related them to corporate social responsibility objectives. A supporting Lafarge case study presented the sustainable divestment of non-core land as part of an informed and responsible approach to regeneration.

• Implementing Global Service Delivery Strategies in Europe.
  Moderator: Dr. Prentice Knight, VP, Discovery, CoreNet Global. Speakers: William Reeves (via videotape), Director, Procter & Gamble; Bill Thummel (via videotape), P&G Global Account Executive, Jones Lang LaSalle; Frank Rogerson, Associate Director of Workplace Services, Procter & Gamble; and Kate Clemo, Procter & Gamble Regional Manager, EMEA, Jones Lang LaSalle. Procter & Gamble has embarked on an innovative mission to improve quality, reduce cost and support its business strategies through a two-stage transformation process – first through implementation of a "shared services" approach and then, more recently, to a "right sourcing" approach to delivering those shared services with Jones Lang LaSalle, P&G's global facility-management partner. The evolved delivery model has also resulted in sustainable improvements to the overall business.

• Emerging Markets Throughout Central and Eastern Europe.
  Moderator: Patrick Morrissey, Executive Director of Global Corporate Services for CB Richard Ellis. Speakers: Chris Bennett, DTZ Zadelhoff Tie Leung Central & Eastern Europe B.V.; Debra Homic Hoge, Director-Europe, General Motors Corporation; and Alan Carswell, Director, European Real Estate, Black & Decker. General Motor's global business growth strategy places the firm solidly in the emerging markets of the developing world, including CEE. Black & Decker moved into the Czech Republic in 2002, also as a result of a global location strategy. Both companies discussed the challenge of cultural diversity and the need for quality market data and management information for such moves.

• The Strategic Role of Place - New Business Opportunities, New Challenges.
  Moderator: Rene Buck, President, Buck Consultants International. Speakers: William Stephenson, Head of Workplace Resource Management, Prudential PLC, and Tim Caiger, VP Real Estate, Oracle Corp. Moderator Buck characterized the best strategy for location decisions and updating business models in the networked world as “a balance between cost matched with quality of business environment and flexibility.” Two very different multi-national companies presented their viewpoints and case studies of recent openings in Romania and India. Stephenson described the successful implementation of a Prudential back-office subsidiary in Mumbai, concluding, “Transferring work to India is a key enabler in improving customer service and significantly reducing costs for the company.” Caiger reviewed Oracle’s expansion into India and Eastern Europe, noting, “While business models have also changed, the real drive behind these decisions is technology – as companies can now communicate to and from anywhere in the world.” Oracle selected Romania as the site for a new, centralized service facility, moving away from its traditional regional locations, Caiger said, adding that companies slow to adapt to a global market fueled by the growth of offshoring may risk remaining competitive.

Tuesday's keynote address was delivered by Richard Hill, noted consultant, lecturer and author on the subject of "The Old and New of Living and Working in Europe." Hill entertained and informed with his lighthearted but relevant view of the interdependent cultures that thrive in today's Europe.

For more information about the speakers, sponsors and programs click here.