Mark Bernardini | Accenture’s $900 million bet on training

Accenture is evaluating its senior executives based on innovation and is spending more than $900 million a year on training, as the global IT giant looks at growing the amount of business it gets from newer technologies.

Digital already contributes over 50% of Accenture’s revenue and it has trained about 70% of its technology workforce to be able to deliver those technologies, a far higher proportion than its Indian rivals.

“For the past 18 months, we have been focusing on measuring innovation as a metric. We measure the end result for a client because it is all about tangible outcomes. Then with the training that we provide and the acquisitions we make, create a combination that keeps us ahead,“ Mohan Sekhar, senior managing director, Technology -Delivery Centers for Technology in India, Accenture, told ET.

Accenture employees, about 1,40,000 of whom are in India, are each assigned 80 hours of classroom training a year, in addition to online courses. Managing direc tors can spend up to a week in training sessions, Sekhar added. The company will spend over $1 billion in acquisitions this year.

The IT company has been running innovation competitions for its employees for the past three years, but has now also added a competition in which clients and employees pitch their innovations together -a client-centric co-innovation challenge. The company has received 384 co-innovation submissions.

Innovation has become the top buzzword for IT executives over the past three years. Infosys touts its zero-distance programme -which aims to innovate in each of the company’s projects. Accenture says it has conducted 250 co-innovation workshops in the first half of FY17 and could end the year with over 400 workshops. The co-innovation not only gives the customers a better outcome but also boosts Accenture’s revenue.

“In some cases, the innovation workshops result in a change request, which is an add-on to the contract. In other cases, they are part of the ongoing innovation that Accenture offers its clients,“ Raghavan Iyer, innovation lead -Accenture Delivery Centers for Technology in India, said.

The company has also focused its innovation challenge on India-specific problems. The latest challenge asked for innovations that would tie-into the Digital India programme launched by Prime Minister Narendra Modi.

“One of the ideas being presented is for a mobile application that will help users pinpoint the nearest clean toilet. If you think about the uses, it is not restricted just to India. The application could have uses in other countries as well,“ Sekhar said.

He added that the reason for the innovation contests, which received 13,700 submissions, was to make innovation a part of every employee’s life. In FY17, the company tripled the number of people thinking about innovation to 40,000.

Mark Bernardini | US soldier identified 72 years after World War II death

Services are set this week for a US soldier from Tennessee who was unaccounted for after being killed by German troops during World War II.

Media outlets reports a funeral for Pfc. Reece Gass will be held Saturday at Doughty-Stevens Funeral Home in Greeneville. He’ll be buried with full military honors at a cemetery in Cross Anchor.

According to the Army’s Defense POW/MIA Accounting Agency, the 20-year-old Gass and at least two others inside a tank died on Jan. 14, 1945, when a German tank fired upon them.

Human remains found in 1947 near Cherain, Belgium, were eventually interred in Luxembourg. Last May the remains were sent to the accounting agency’s lab and were identified as those of Gass earlier this year.

Mark Bernardini | US real estate to benefit under Trump presidency

The US real estate sector is set to benefit under the presidency of Donald Trump, according to a group of investors and managers gathered at this year’s IPE Real Estate Global Conference & Awards in Munich.

A straw poll of delegates at the conference was split over the question. A slight majority (53.8% of delegates) took the view that Trump administration’s actions would drive growth US real estate.

However, panellists agreed unanimously that Trump’s policy agenda, particularly regarding tax reform and infrastructure spending, would benefit US real estate.

Jack Gay, global head of commercial real estate debt at TH Real Estate, said: “Whether the announced stimulus package can be put through congress remains to be seen, but we see Mr Trump’s programmes and policies having a positive impact.

”As a result, we are not changing our investment strategy, although we are mindful of where we are in the real estate cycle.”

Frank Lively, executive vice president of Wafra Investment Advisory Group, added: “I am not a fan of Mr Trump, but if he can do anything right, it is in the real estate sector.

“His proposed policies as outlined will have a very positive effect, and that will take us to a ‘middle-inning’ scenario in terms of the cycle.”

Jim Fetgatter, CEO of AFIRE, an organisation representing foreign investors in US real estate, said a huge majority (85%) of its members considered Donald Trump’s election a negative event for the sector, according to a survey carried out before the US presidential election.

However, Fetgatter added, “foreign investors are coming to the US more than ever”.

Panellists broadly agreed that one of the sectors set to grow under the Trump administration is infrastructure.

Lively said: “From our perspective, we have focus on infrastructure, but it is not a core strategy.

“The sector is going to present plenty of opportunities, and lots of capital can find a home, if the policies are implemented. Whether all that capital flows to infrastructure projects, remains to be seen.”

Despite some negative sentiment surrounding US residential, the sector still presents opportunities, according to Dietrich Heidtmann, head of international capital markets at GTIS Partners.

Heidtmann said: “We still believe this is an attractive sector to pursue. After the financial crisis, household formation and housing starts stopped.

“We have also seen a dramatic decline in ownership rates. We don’t believe, as some do, that ownership rates will start growing fast again.

“The rental sector is here to stay. But demographic trends can now drive growth in residential housing. The age group between 30 and 39 is driving household formation, and that brings the need to accommodate families.

“This contrasts with the supply situation, in that only half of the apartment sector is suitable for accommodating families. Suburban living is still growing and the multifamily sector is responding to that.”

Lively added: “We have been very focused on US multifamily. We think that in the long term this is a solid product with solid future.”

Panellists discussed the outlook for alternative asset classes, which they suggested is generally bright under Trump’s presidency.

Logistics, in particular, is “a terrific market”, according to Lively. He said: “Internet is putting pressure on traditional retail, but there is money to be made in traditional retail as well, as those assets are reconfigured to meet changes in demand.”

Greg Spick, director at the UPS pension plan, said that traditional retail property is ripe for M&A activity. “We are seeing but also are opportunities in the sector”, he said.

Fetgatter mentioned that logistics is high up on the list of sectors favoured by foreign investors.

In another straw poll, delegates were asked what are the best opportunities in the US real estate market today. The majority (37%) chose residential, followed by alternatives (33%), industrial (20%), retail (6%) and office (4%).

Piet Eichholtz, professor of finance & real estate at Maastricht University, noted how the ‘core’ of a traditional investment portfolio, which consisted of retail and office assets, only took 10% of preferences.

Mark Bernardini | Try Canada if you don’t like US politics

Can a remote Canadian island become a potential refuge for Americans trying to escape the current administration? The emails started coming into Cape Breton Island just after Donald Trump won his first presidential primary last year. They still arrive from Americans who think they might be willing to relocate to a place with short days and frigid temperatures five months of the year.

“I am so sick of what has happened to my beautiful country,” one resident of the Lower Forty-Eight wrote.

The first sign of what Rob Calabrese would come to think of as America’s unmooring began last year. Just after Donald Trump won his first presidential primary, Calabrese published a $28 website that he’d designed in 30 minutes. “Hi Americans!” What followed was a sales pitch for an island where Muslims could “roam freely,” and where the only walls were those “holding up the roofs” of “extremely affordable houses.”

“Let’s get the word out!” Calabrese wrote, adding a photo of an pristine coastline along the Atlantic Ocean. “Move to Cape Breton if Donald Trump Wins!”

It was initially a joke but seven hours after Calabrese linked the site to the Facebook page of the pop radio station where he works as a DJ, in came an email from America. “Not sure if this is real but I’ll bite.” And then another: “It pains me to think of leaving, but this country is beyond repair.”

Yankees quickly realized Calabrese’s effort was not a joke. The Calabrese response about housing: “You’ll find it one of the, if not the most, affordable in North America! If you want to take a look at some of the latest listings,” he emailed to The States some websites of Cape Breton Island real estate companies.

He started answering questions about immigration…“The process has changed, some people say it is much less complex, let’s get started”…and dual citizenship…“Every country decides whom it considers to be a citizen. If more than one country recognizes you as a citizen, you have dual citizenship. Find out more here.”

Some asked if Cape Breton Island was offering a special program. “No,” said Calabrese. “There is no special program. The immigration process would happen in the conventional way. The purpose of the web site is to show that if you are interested in coming to Canada, that Cape Breton Island would be a place where you would be welcomed with open arms!”

Calabrese started answering questions about retirees immigrating, (“There are many paths to permanent residency and citizenship) and the economic climate in Cape Breton Island. He was candid: “Cape Breton’s economy has suffered for many years. In the past we depended on coal mines and steel production but those industries are gone. We have a burgeoning IT sector and some great new tech businesses are starting here.”

Calabrese increased his trolling: “Want more information, Google Cape Breton Island if Donald Trump Wins.”

The U.S. side of the phenomenon was “unsettling,” according to the Washington Post: “The toll of the president’s proposals has been swift on the nation’s tourism industry, with tour group organizers saying that people suddenly have an unsettling sense that the United States isn’t as welcoming a place as it once was. One industry expert projected lost revenue for 2017 at $7.4 billion.”

A-E will apprise Greater Jasper residents of any mass emigration to a beautiful but chilly destination. Google Cape Breton Island Tourism website for stunning photographs of the beautiful part.

The future of coal

The quick erosion of most markets for U.S. and Cape Breton Island coal are inescapable. Just look at markets for West Virginia and Kentucky coal. Despite the President’s campaign pledges, the first two sentence in this paragraph are inevitable.

More insight into inevitability: earlier this month, the Harlan County, Ky., Coal Museum switched to solar power.

Mark Bernardini | Latest Readings Show Commercial Property Prices Continuing to Moderate

With reported increases in cap rates and a slowing investment sales market, the three major commercial property prices indices (CPPIs) are showing at best meagre gains.

The all-property CPPI tracked by ratings firm Moody’s and research firm Real Capital Analytics (RCA) registered a 0.5 percent increase in March. Price indices for office buildings in Central Business Districts (CBD) and retail properties showed the highest upward jumps, at 2.4 percent and 1.3 percent respectively. The industrial sector and office properties in suburban areas posted declines in prices, at 0.3 percent and 0.1 percent. The apartment sector has also posted a decline in prices during the period, at 0.5 percent.

The Moody’s/RCA CPPI tracks commercial property prices based on repeat sales that take place two months prior to the publication of its reports.

Green Street Advisors, a Newport Beach, Calif.-based research firm, reported that its aggregate CPPI remained flat in April. The CPPIs for every property type Green Street tracks, besides health care, remained flat as well during the month. Health care properties registered a 1.0 percent price increase in April. Green Street researchers attribute the slowdown in price growth to rising cap rates, which are offsetting growing rental incomes.

Green Street’s CPPI is based on unleveraged commercial property values captured from sales that are currently being negotiated or contracted.

The value-weighted U.S. composite price index tracked by research firm CoStar registered a 2.8 percent decline for the first quarter of 2017. The value-weighted index tracks sales of larger assets in core markets. On the other hand, CoStar’s equal-weighted composite price index, which looks at lower-priced sales in secondary and tertiary markets, went up by 4.8 percent during the same period.

“The recent divergence likely reflects a maturing cycle for commercial real estate investment, especially for the high-value properties in core markets that initially led the recovery,” CoStar researchers wrote in their report.

According to CoStar data, the price index for multifamily properties showed the lowest growth during the first quarter of all the property types it tracks, at 1.9 percent. Over the past two years, the multifamily index posted average quarterly increases of 2.9 percent. Indices for the other property types, including office, retail, industrial, hospitality and land, registered gains of 2.0 percent or more in the first quarter of 2017, CoStar reported.

CoStar used repeat-sale methodology in its indices.

Mark Bernardini | Banks are tightening commercial real estate loan standards – Fed

Loan officers at U.S. banks reported tightening their lending standards for commercial real estate loans over the last year, the Federal Reserve said on Monday in a report that could heighten concerns about the outlook for commercial real estate.

Officials at the U.S. central bank, including Boston Fed President Eric Rosengren, have warned that a run-up in commercial real estate prices could amplify any future economic downturn.

On Monday, the Fed said in a quarterly report that standards for overall businesses appeared largely unchanged during the first quarter. But in this latest poll of senior loan officers, the Fed included special questions on commercial real estate lending over the past year.

U.S. banks, in describing why they were tightening standards, cited “a less favorable or more uncertain outlook for CRE property prices, capitalization rates and vacancy rates,” the Fed said in its report.

The Fed is putting a bigger focus this year on commercial real estate in its annual “stress tests” of how well big banks could weather financial turmoil.

Mark Bernardini | Investors Purchase High Volume of iShares Dow Jones US Real Estate Call Options (IYR)

iShares Dow Jones US Real Estate (NYSE:IYR) was the target of some unusual options trading on Monday. Investors purchased 11,849 call options on the company. This represents an increase of 118% compared to the average volume of 5,424 call options.

Shares of iShares Dow Jones US Real Estate (NYSE:IYR) opened at 78.67 on Friday. The company has a 50-day moving average price of $79.05 and a 200-day moving average price of $77.43. iShares Dow Jones US Real Estate has a 52 week low of $72.11 and a 52 week high of $85.80.

iShares Dow Jones US Real Estate Company Profile
iShares U.S. Real Estate ETF, formerly iShares Dow Jones U.S. Real Estate Index Fund (the Fund), is a non-diversified fund. The Fund seeks investment results that correspond generally to the price and yield performance of the Dow Jones U.S. Real Estate Index (the Index). The Index measures the performance of the real estate sector of the United States equity market, and includes companies in the industry groups, such as real estate holding and development and real estate investment trusts (REITs).

Mark Bernardini | Alphabet paid Google CEO Sundar Pichai US$200 million in 2016

Google CEO Sundar Pichai received a US$200 million ($291m) compensation package last year for running the internet company that makes nearly all the money for Alphabet Inc.
Most of the pay consisted of Alphabet stock that the company valued at US$198.7m in securities documents filed Friday. Alphabet gave the award to Pichai in January 2016, a few months after he succeeded Larry Page as Google’s CEO. Pichai still reports to Page, a Google co-founder who is now Alphabet’s CEO.
Page limits his annual pay to US$1 because he already has an estimated fortune of US$41 billion.
The stock that Pichai received will vest in quarterly increments through January 2020.
The 44-year-old Pichai also received a US$650,000 salary last year in addition to personal security services and air travel valued at US$372,000.

Mark Bernardini | AccessPay sets sights on US market with £2 million debt financing

Manchester, UK-based payments router AccessPay has secured £2 million in debt financing from Clydesdale and Yorkshire Bank amid plans for a recruitment drive and expansion into US markets.

A specialist in cloud-based payments technology, with hundreds of UK-based customers and 35 employees, AccessPay enables payment routing through all of the major UK and international networks including Bacs, Swift, Faster Payments, Sepa and Direct Debit.

With a focus on organic growth, the orgnisation has its sights on increasing its business-reach to more than 10,000 organisations, who will join with other current high-profile clients such as Clifford Thames and European research organisation Cern.

Anish Kapoor, CEO of Accesspay says the funding will enable the business to recruit up to 60 new members of staff, including developers, sales, operations and marketing, before the end of 2017 and provides the platform for expansion into the US market later this year.

The firm has previously raised equity from two primary investors in the US: True Ventures and Route 66 Ventures.

Mark Bernardini | Number of U.S. bank branches to shrink 20 percent in five years: real estate report

The number of bank branches in the United States will shrink by as much as 20 percent in five years, according to a report from commercial real estate firm JLL.

This reduction comes as banks are looking for ways to cut costs and to encourage their customers to embrace mobile banking technology rather than completing basic transactions within a physical branch.

The U.S. banking industry could save as much as $8.3 billion annually if it trimmed the number of branches and downsized the average bank branch from 5,000 to 3,000 square feet, JLL found.

U.S. banks have reduced their footprint by around 8 percent since the financial crisis, from 97,000 branches to roughly 90,000.