Devil’s in the detail in specialised asset management

Tuesday 16 February 2021
There are many factors that go into the successful management of a movie cinema. Arguably, even more so when the cinema is no longer in use, or ‘hibernated', such as 24/7 security, restricted access control, site safety and more.
The payment of utilities bills could perhaps be perceived as one of the ‘lower risk’ issues with a hibernated property – but what if taking a closer look could result in $200,000 in cost savings? That was the case for Yvonne Wade, Facilities Manager at CI Australia, for the Event Hospitality & Entertainment portfolio. A query on an electricity bill for a hibernated cinema in Queensland under CI’s management led to this unexpected - yet significant and impressive - outcome.
As one of Australia’s leading entertainment, hospitality and leisure companies, Event Hospitality & Entertainment operates brands including Event Cinemas, Rydges Hotels & Resorts and QT Hotels & Resorts. As part of its comprehensive property strategy, certain assets have been hibernated in the short-term, while a future use strategy and/or redevelopment strategy is developed. While unavailable for public use, Event’s commitment to ensuring its properties comply with industry and health and safety codes sees the assets undergo regular cleaning, security and facilities management and maintenance.
As the Facilities Managers for this portfolio in question - yet not contracted to oversee utilities management specifically – CI heard about the unusually high electricity bill through day-to-day communication. Motivated to support Event across all its property management-related endeavours, CI began looking into the issue and as the lead on the portfolio, Yvonne engaged relevant stakeholders to start the process.
“The restricted access to the site presented some issues in gaining a meter reading,” Yvonne said. “We were able to overcome this by engaging the on-site security staff to conduct the initial reading, and after it was returned, the most likely conclusion was in fact that there was an error and that the cinema was being charged at fully operational levels.”
Right she was. The hibernation process of the cinema - prior to CI's engagement - had inadvertently blocked access to the meter and had led it not being read correctly in two years. Yvonne’s actions, in conjunction with Event’s direction and cooperation of the electricity supplier, saw the meter transferred over to remote readings in future. “This allowed for the site’s low energy consumption to be confirmed at the next reading, and for the cinema to be classed as 'low tariff' site, decreasing monthly static fees and significant refund for our valued clients,” Yvonne said.
The refund was significant in deed, totalling approximately $200,000 in prior payments. It’s a stark reminder of why the devil’s in the detail in asset management, specifically for specialised asset classes, said Yvonne. “Properties such as cinemas or hotels have purpose-built facilities and often more complex operating and engineering systems than a commercial office building, for example. It’s crucial when managing these asset types, particularly when hibernated, to know where potential risk factors lie and closely monitor outputs, including energy. Not only can this result in significant cost savings, but contributes towards ensuring efficient, sustainable and future-ready assets, regardless of whether they are active or hibernated.”
"We were able to rectify this situation swiftly thanks to the cooperation and communication between all stakeholders, and are delighted to continue supporting our valued client Event in successfully delivering its commercial real estate strategy.”
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