Transforming delivery of corporate real estate portfolios in Africa

Africa is one of the world’s most dynamic emerging markets and has one of its fastest-growing populations, with the latter projected to double by 2050. It is expected that 950 million more people will be living in cities across the continent by mid-century.

As one of the continent’s largest financial institutions and a force in corporate and investment finance, Absa Group is playing its part in this economic growth. Supporting Absa’s growth ambitions is a major Capital Investment Plan (CIP) for its commercial and retail property, with projects ranging from commercial fit-outs to the development of major headquarters buildings.

Absa’s Corporate Real Estate Services (CRES) is delivering these through a joint project management office (PMO) with Turner & Townsend, whose partnership is working to transform processes and outcomes for the bank’s real estate portfolio.

Teambuilding to drive success

The PMO acts as a global capital projects client team and central project management office and control function, working with internal stakeholders to take projects from inception through to completion.

The PMO team was reviewed when Rob Coetzee took on the role of Head of Capital Projects four years ago.

I inherited a team of competent professionals and looked at their capabilities, strengths, and weaknesses and built the team around those factors to ensure strategic momentum.

Having come to the company with international PMO experience, Coetzee had a clear objective. “My ethos has always been to develop the relationship in a way that forges a single team rather than a ‘consultancy’ role within Absa, with Turner & Townsend as part of the Absa team,” he says.

That team now has up to 30 dedicated personnel – depending on workflow and project demands – who cover quantity surveying/project management, administrative and related functions.

Better outcomes for projects and people

The partnership’s effectiveness is evident in the 400-plus projects it has delivered to date, and its achievements in cost-saving and efficiency in delivery, local transformation and engagement, sustainability and social inclusion. The 32-storey, Towers Main redevelopment in Johannesburg, which was delivered by developer Divercity Properties is one example.

The 1970s-built tower, central to Absa’s Johannesburg campus in the city’s central business district (CBD), was redeveloped to achieve a 4-star rating under the Green Star Sustainability certification system. Absa committed to taking nine floors of office space from Divercity in the building and the remainder was transformed into affordable rental apartments, while the neighbouring square and thoroughfares were upgraded to enhance the public realm, with local businesses being involved in the transformation.

The engagement was fantastic, and the end result is an environment, building and outdoor space that has transformed the Absa Johannesburg CBD campus.

The engagement is driving diversity and social inclusion both through its engagement with the project supply chain and within its own team. It is supporting SME and qualifying small enterprise (QSE) businesses and skills development, working with them to develop products, such as furniture, helping them grow their brands and providing work, as well as finance. It has commitments to procure goods and services from black-owned and black-women-owned businesses.

“We are achieving exceptional results, transferring skills and helping drive transformation in the construction industry,” says Coetzee. Internally, Coetzee’s own determination to foster inclusion and young talent has resulted in a diverse team, where graduates and women are benefiting from exposure to best global practice and careers are being made.

Tapping into knowledge and data

Coetzee sums up the development environment in Africa as, "extremely dynamic and challenging," particularly when it comes to securing contractor capability, labour and materials, and COVID-19 has added to those constraints.

With Absa’s operations spanning around 12 nations in Africa alone, it is important for the team to understand the cultural priorities of locations where it works, manage the expectations of stakeholders and at the same time deliver the bank’s overall commercial objectives.

It is a tightrope walk to ensure a balance is maintained and projects are delivered to satisfy all parties, budget, programme and quality expectations.

Key leadership qualities sought for projects are the ability to, “relate to the stakeholders, understand their culture and deliver messages in a way that it is well received and critically gains their support,” he says. The PMO model is central here in enabling personality to be matched to projects.

But it is the access to global expertise, research, data and systems that is, for Coetzee, the core benefit of the PMO. “Wherever there is a challenge, I’ve been able to draw on experience of how it has been tackled,” he explains. Up-to-date data has been critical in helping the PMO evaluate project costs and benchmark to drive best value across diverse locations.

This, in turn, enabled Absa to develop its own internal benchmark rates report to help regional offices understand their costs and develop more accurate capital investment plans.

Absa and Turner & Townsend also collaborated to develop a digital tool for assessing workspace requirements. This innovation grew out of a recognition of the significant resource going into defining office space requirements and research by Coetzee into evolving ways of working.

That resulted in a standardised specification and design, which was turned into the interactive Workspace platform, enabling new office space to be scoped, defined, visualised in 3D and designed and costed rapidly.

Since its introduction in summer 2021, the platform has, he says, “revolutionised our interaction with our internal clients, transforming their understanding of our business and allowing them to visualise their new workspace”.

A good and open relationship

Ask Coetzee how the PMO route has been so transformative for Absa and he cites the open and honest relationship between the partners. Although the team’s make-up has changed over four years, he explains:

We have had succession in the leadership of the PMO team without having to draft new resources in. I judge the success of the team on this capability.

Another factor that has contributed to the relationship’s success is Absa’s decision-making capability. “Absa is particularly good at empowering the department heads to run their businesses with an emphasis on agility, speed and accountability,” says Coetzee.

To others considering adopting the PMO route in Africa, he says simply, “What are you waiting for? The benefits far outweigh the initial teething problems of mobilising a PMO and the access to skills, research and systems cannot be underestimated.

The ability to scale up and down on resourcing and draft specialist resources into the business quickly and efficiently cannot be matched in a typical employer-employee structure.” The results speak for themselves.

Rob Coetzee's lessons for success:

• The business owner must be empowered to make decisions and able to streamline decision making.
• Ensure the PMO is seen as an integral part of the business, and not as an external party or service provider.
• Communication is paramount - we embed a strict communication protocol to ensure a single line of responsibility and communication with consultants and contractors.
• Build people in the team up so they can leave but treat them well, so they want to stay. Recognition is paramount to motivation.
• Remember that the reputation of the PMO is based on delivery.