As the Real Estate industry moves into the next phase, it is coming to grips with an ever changing landscape as people, spaces, and purpose align to redefine how we think about our cities and how we reimagine them.
Our experts from across the firm highlighted the key things they believe in-house lawyers should be considering and preparing for as we head into 2022.
The topics covered included: Revitalising Cities, Workplaces and Vaccinations, Emerging Asset Classes, Cyber Security and Risk Governance, Privacy Reform and Monetisation of Data and Capital Partnering.
You can find an overview of each session below, along with audio excerpts and key takeaways for you to listen, read and share.
In our recent Navigating the Real Estate Industry Horizons virtual roundtable, our experts from across the firm spoke on the theme: Revitalising our cities and building resilience. As the Real Estate industry moves into the next phase, it is coming to grips with an ever changing landscape as people, spaces, and purpose align to redefine how we think about our cities and how we reimagine them.
Our experts highlighted the key things they believe in-house lawyers should be considering and preparing for as we head into 2022. The conversation focussed on the tough questions and what we are observing as organisations respond to imminent pressures. You can find an overview of each session below, along with audio excerpts and key takeaways for you to listen, read and share.
The key takeaways from Cameron Charlton, Managing Partner, Infrastructure, Construction and Property, were:
- New ways of working are here to stay. Your teams have embraced agile and hybrid office/work from home work arrangements. This will change how workplaces configured moving forward. You need to give your team a reason to come to the office. Create the physical environment that is going to promote the human interactions and organic learning and mentoring that the workforce is craving. Building effective teams is the key to growth and innovation.
- As your companies are in the business of developing and managing commercial buildings, you need to be alive to the changing tenant demands for office space as this will flow through to building design and the lease deals you are asked to advise on. Expect a flight to quality and a heightened focus on amenity both within a building and the precincts in which they are located. You need to assist the business position itself for this shift. This will create some challenges for B grade buildings in uninspiring parts of the city. Repurposing options may need to be considered.
Workplaces and vaccinations
The key takeaways from Kristy Edser, Office Managing Partner, Workplace, were:
- If considering a vaccination mandate, you must assess whether it is reasonable for your workplace to mandate. Consider your risk profile and do a WHS risk assessment. If your staff interact with customers, suppliers, the public, these will all be factors. Some roles will be higher risk than others and could be of higher priority.
- You have a WHS obligation to consult your staff about COVID19. During consultation, enquire as to your current vaccination rate, how your staff feel about mandating vaccinations and if they are unsure what additional information could assist them? Data suggests that those that are unsure about being vaccinated really value access to specialist medical information. This can be as persuasive as an incentive.
- Determine and communicate your position around returning to the office and vaccinations. Prepare your own Roadmap as to when the return will happen. If the position is ‘no jab, no office’, then consider:
- making reasonable accommodations for those that are medically unable to be vaccinated;
- what will be the impact on a person's role if they refuse to comply – can they work from home forever without issue?; and
- for those that return, will you require proof of vaccination, and if so, in what form?
Emerging asset classes
The key takeaways from Adrian Rich, Partner and Real Estate Business Unit Leader, and Wissam Abwi, Partner, Corporate, were:
- With emerging asset classes, there’s more than meets the eye. There is a large and constantly evolving regulatory overlay in emerging real estate asset classes such as aged care, health, childcare, build to rent and agriculture. It is therefore critical that you be across not just the core real estate aspects of any deal, but also the regulatory, operational and reputational frameworks that have a material impact on these asset classes.
- Accept that you don’t know what you don’t know. Partnering with consultants who can offer multi-disciplinary expertise (in addition to a core real estate offering) to inform how you can successfully navigate emerging asset class transactions will be pivotal to extracting maximum commercial value whilst minimising legal risk.
- Expect the unexpected. In recent years we have witnessed unprecedented shifts in the real estate sector in response to changing consumer habits, perhaps most vividly illustrated by the rise of online retail and last mile logistics, private healthcare and the trend towards renting, rather than owning, your own home. As a result, legal teams need to remain across market and capital trends not just in Australia but also globally, and be ‘deal ready’ when the business pursues transaction opportunities that transcend traditional asset classes and deal structures.
Cyber security and risk governance
The key takeaways from Donna Worthington, Partner, Risk & Regulatory, were:
- Keep your skills and experience up to date. Build a minimum level of cyber knowledge and ensure that you are familiar with the key technical terms.
- Ensure you aware of your organisation’s cyber security risk profile (especially your key legal risks and your key assets or the ‘crown jewels’) and consider where cyber risk sits on your priorities.
- Regularly test and update your cyber incident and data breach response plan, ensure you have a seat at the table, that roles and responsibilities are understood and you have partners in place to help you navigate an incident should it occur.
Privacy reform and monetisation of data
The key takeaways from Paul Kallenbach, Partner, Technology, were:
- Help your organisation build trust through transparency of data use. Communicate clearly and effectively with consumers about how your organisation uses, holds, processes and discloses data.
- Make privacy and data protection a central part of your business strategy. Consider elevating the privacy function to the C-suite through a Chief Data Officer or a Chief Privacy Officer and empower those roles as the guiding force for the organisation and the way that consumer data is used. Most importantly, do not treat privacy and data protection as simply a tick-the-box exercise.
- Implement and maintain robust cyber risk governance over the data that is held by your organisation.
The key takeaways from Carla Deluca, Partner and Real Estate Industry Leader, and Wissam Abwi, Partner, Corporate were:
- Have you chosen the right Capital Partner? From the very outset you need to understand who your partner is, what their objectives are and what their culture is. Consider whether that aligns with your organisation’s culture and objectives as this will feed into the effectiveness of the capital partnership which is akin to a corporate marriage. Think of the heads of agreement as a 'getting to know you' phase.
- Focus on the governance and control aspects of the capital partnership from the very outset. Things can go wrong when parties are not aligned on governance and control. Additionally, it is best to determine at the outset the different treatment of certain decisions under the capital partnership. For example, there will be some decisions which will be decisions of fact which can be determined by an expert. However, there will be other decisions of a commercial nature that may not be appropriately determined by an expert and the parties then need to consider, what will happen when a decision cannot be made e.g. is an exit strategy invoked.
- The exit strategy is often thought through at a high level but not considered in great detail. It is important to think about the exit strategy from the outset. Think about liquidity, flexibility and what that means for you and the other side. The exit strategy of both sides will feed into the pre-emptive strategies.