Kaela Fenn-Smith loves being back at CBRE, and not only because the firm has just reopened its redesigned, environmentally sound and really rather nice HQ at Henrietta House in London’s West End (pictured below).
Fenn-Smith, who began her career with CBRE in her Canadian homeland, loves being back at the firm because she’s working with a purpose. She’s working on something that has an impact. And something that, when she goes home at night and talks to her teenage kids, they understand and care about too.
The former managing director of Real Estate Balance and head of commercial at Landsec returned to CBRE in November 2020, first taking up the role of head of UK advisory and transaction investor services and then, in December last year, being promoted to managing director of ESG consultancy and sustainability services for the adviser’s UK & Ireland business.
“I came in for the advisory role and that was all-encompassing on how we serve the investors as a whole,” says Fenn-Smith of that original appointment. “But the future of leasing was about so much more than leasing. It was about engaging with our occupier business, engaging with our global business, working with our workplace teams, our digital teams, our ESG teams. Not to mention the multiple services within that.”
So much of that all-encompassing conversation was around ESG, says Fenn-Smith, and it soon became evident that the firm needed to scale up its sustainability services business and embed it across the whole service provision that CBRE was offering. The ESG consultancy delivers across five key service lines – investors’ ESG; environmental risk; sustainability, impact assessment and social value; occupier ESG; and net zero and energy consultancy. It was time to show clients that, if they wanted a green premium across their portfolios, they needed a premium green service to help them. And who better than the big green giant?
From strength to strength
Since taking on the managing director role for CBRE’s ESG consultancy business, Fenn-Smith has seen her team grow by 70% to 63 individuals. Key members of the leadership team include Sylvie Sasaki, head of CBRE’s ESG strategy; Nicola Esposito, head of net zero and energy consultancy; Georgina Dowling, head of sustainability, impact assessment and social value; Helen Newman, head of sustainable finance; Sam Carson, head of sustainability – valuations and advisory services; and Ed Blackburn, head of environmental risk.
And she expects that number to grow further over the next few years as environmental and societal issues and the accompanying governance that goes with them continue to grow in importance to the built environment.
While Fenn-Smith happily admits the members of her team are the real on-the-ground experts when it comes to sustainability, she brings with her hands-on experience of what makes investors and developers tick and what occupiers want. And it is this, coupled with the vast tentacles of expertise that CBRE has across data, digital and professional services, that she – and the business as a whole – believes will enable the firm to offer a premium green service to its clients.
“This is a huge growth opportunity, where we can deliver exceptional results for our clients while driving forward positive change across the industry, influencing pace on social impact and decarbonising the built environment,” says Fenn-Smith.
She says the role is aligned to the investor and occupier collaboration she wanted to drive when she first came back to the business. She believes ESG is the place where change in the industry can happen and is the holy grail of where collaborative effort between investor and occupier may be able to be universally achieved. It is a big ambition, but Fenn-Smith lights up when talking about this opportunity to make change. It is clearly something that drives her.
After seven years at Landsec, where she was responsible for commercial strategy across its 3.5m sq ft retail and office pipeline and played an integral role in the REIT’s shift to a customer-focused business, she left to take up the role of managing director of Real Estate Balance, an industry body tasked with rebalancing the sector from a gender point of view.
When you talk to Fenn-Smith, it is clear that purpose matters. And saving the planet, brick by brick, is a pretty good purpose to have.
Not that Fenn-Smith is holding on to any romantic ideals that, in a role like hers, she would ever be able to sit back, rub her hands together and think “my job here is done”. There are a whole host of changes and challenges the industry needs to contend with before operation of the business of real estate becomes fully sustainable.
Making green leases and data work
Key among those challenges for her and her team are creating green leases that work for both occupier and landlord.
Green leases may have been around for years, but they are often the cause of major contention, with very little of that collaboration between parties that Fenn-Smith is focused on achieving. That means that their use can be scarce. But with more and more investors making decisions through the lens of ESG, a green lease for a building is a vital part of the investment process.
Data – acquiring it, understanding it and using it appropriately – forms another key challenge and opportunity for Fenn-Smith and her growing team. Much of the environmental performance of a building is controlled not by the owner, but by the occupier. While a developer can build the most environmentally friendly building, it is up to the occupier to operate it in such a way. Having the data, sharing the data and collaborating on how to improve it will have a key role in the greening up of real estate.
CBRE has its own growing suite of data solutions that it offers to clients to help with the process, from tools that help measure social value, to Asset IQ, a web-based platform that connects to a building management system to capture live data on how power, lighting, ventilation and air-conditioning systems are used, to its own air quality monitoring tool, CBRE Breathe.
Asset IQ is currently used across more than 3.5m sq ft of commercial buildings managed by CBRE and has helped reduce energy usage by some 10%, offering users a whopping 234% return on their investment.
Empowering investors
For Fenn-Smith, it is solutions like this that keep her excited about the real estate sector after almost three decades in it.
The overriding goal for her team is to help simplify the myriad things that investors need to consider when it comes to operating in a world where ESG is only going to keep moving up the agenda. Today, investors need to understand what increasing regulation will mean for their capital expenditure – shifting the vast majority of existing commercial buildings to an EPC B rating by 2030 is likely to cost millions, for example. New rules to measure energy in use are also expected to be implemented in the not-too-distant future, adding further red tape, further cost and the need for more data management.
Investors need to understand the impact of embodied carbon, the impact of how and where we work, the supply chain and of all the many measurements that exist out there. And how all of that ties into every element of the built environment, from development and design, to leasing, valuation, financing, trading etc.
“We want to understand and advise on what good looks like,” says Fenn-Smith. “And how our clients get there.”
Due diligence today is much more complicated than it used to be, she says. What might have looked like a good investment in the past, might not look good going forward. Her team’s role is to be able to provide a view on – and a strategy for – the long-term value of an asset. It is a complicated business, but Fenn-Smith believes the UK real estate sector – and CBRE, of course – can and should be a model for that. “We are a centre of excellence in the UK,” says Fenn-Smith. “And I want us to expand that globally.”
And there’s that purpose again. The reason Fenn-Smith loves being back at CBRE. The opportunity to save the world.
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