COMMERCIAL PROPERTY with Andrew Hiskens
Relocating, the big questions
Andrew Hiskens, Colliers International’s North Shore Director, provides some advice on questions you should consider when contemplating new office premises.
What are my options?
Stay put. If your current space satisfies your accommodation needs, but you are approaching the end of your lease, you may wish to consider a ‘stay put’. You will need to ensure the space is available for you to extend your lease, and then negotiate a new lease with the building owner through your
leasing representative.
Relocate. The expiry of your lease could offer you an exciting opportunity to transform your business and create new efficiencies by relocating to new premises.
Why should I relocate?
Business needs. If your current space is too small, too large or inflexible relative to the way your organisation works, then new or re-engineered premises can act as a springboard for improved productivity and operational cost savings. Additionally, market conditions may create cost benefits supporting the business case for relocation.
Brand value enhancement. The building which you occupy and the fitout in your tenancy speaks volumes about your organisation. A revitalised fitout or new premises, can strengthen your employees’ sense of brand as well as communicate your core values to customers and other stakeholders.
Employee satisfaction and retention. Entrepreneurial businesses will consider the many positive flow-on benefits companies achieve in re-positioning their business and their people into better accommodation. Increases in staff morale lead to increases in staff productivity. Increases in staff productivity lead to increases in the bottom line financial performance of any business.
How much will it cost?
Operational costs. Negotiability of rental and incentives is dependent on the equilibrium in your local marketplace. In certain markets, the development cycle has created favourable circumstances for tenants considering relocation. To understand conditions in your office market, contact your Colliers International professional for the outlook in your location.
Fitout and “make good” costs. Your entry and exit strategy to a lease can greatly affect the real cost of your commitment. Workplace design and fitout costs should be viewed as an organisational opportunity – a well-planned and executed fitout will adapt to your organisation’s growth and changing needs and minimise churn costs. A balance between your fitout costs and the benefit it yields to your organisation is therefore critical. In addition, “make good” commitments will affect your cashflow when exiting a lease. These costs are covered in more detail in this Office Leasing Guide.
When should I start?
Plan, plan, plan. Whether you decide to stay or
go, knowledge is key. Allow sufficient time to ascertain your current situation, review other options, asses the marketplace context and possibly negotiate with your current landlord to ensure you optimise the end result.
Timing.The period required to conduct this process ranges from three to size months as a minimum, to two years or more for larger organisations.
Who should I involve?
Your internal steering committee should be chaired by a senior employee, supported by decision-makers and influencers including human resources, IT, divisional heads and staff.
You may wish to conduct a survey of your staff to determine their needs, preferred workstyle and location. Colliers International has a proven in-depth Needs Analysis Survey available to assist in this step.
Professional real estate advice is a critical part of the project team skill set. This will arm you with insight into the marketplace, your alternative options and the financial implications of the stay or go scenarios. By providing knowledge of productivity-enhancing office fitouts, a skilled workplace
strategist and design professional will complete
the team.
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