The Race to new space
The addition of new quality office space across NZ has been widely publicised – just take Auckland for example with over 100,000sqm expected to be delivered by 2019. Whether it is Britomart, Commercial Bay, Victoria St or Wynard Quarter – the location is becoming less relevant. So what are the drivers that attracting some of the biggest & fastest growing companies to new buildings?
Increased business activity and confidence is encouraging more companies to move to better premises. Many are finding their new building is not only reducing occupancy costs but also resulting in healthier, happier staff.
A significant tenant shift to new, high quality premises has been a feature of the office market over the past 18 months, most obviously in Auckland but also on a smaller scale in other parts of the country.
So what are the factors prompting some of New Zealand’s biggest companies to relocate to these new buildings?
Consolidation: Many movers are consolidating from multiple locations. Examples include media companies NZME and Fairfax, Fonterra, Datacom, Vodafone and Auckland Transport. Lloyd Budd, Bayleys’ director commercial, retail and operations, says there are numerous benefits to consolidating to new premises: more productive workplaces resulting from larger floor plates and less time wasted travelling between different locations; increased collaboration providing innovation and growth opportunities; and cost savings from an overall reduction in space required.
NZME’s consolidation to 8,300m2 in the BDO office centre on Victoria Street West in Auckland almost halved its CBD footprint. It moved from two locations at 46-58 Albert Street and 54 Cook Street totalling 15,400m2 into the first three levels of this new complex which offered up to 3,200m2 of highly efficient space per floor. Fonterra’s move to its new premises in Fanshawe Street also reduced its average occupancy rate down to one person to 8m2, well below the norm in a traditional desk-based system of one to 12m2.
“While these new buildings have higher face rentals, the absolute occupancy costs for many relocating tenants are lower than where they were because less space is required to accommodate the same number of staff,” says Budd. “Some of this is due to the efficiency of the space itself with much bigger and better column and partition free floor areas with plenty of natural light and savings also in operating expenses from less power and water usage. Some of it is also due to changes in the way we are working which means we don’t need as much desk space. Most of us work from our laptops and mobile phones these days and we don’t require places for desk phones or bulky computers any more. Double sided desks are a thing of the past and the average desk depth is now around 60cm rather than 90cm.”
Health & Wellbeing: All new buildings either have a NZ Green Building Council Green Star rating or incorporate key elements of modern green or wellbeing rating tools. The environmental benefits of using less energy and water and recycled and sustainable building materials have been widely publicised.
There is also growing evidence that occupants of these buildings are healthier, says Budd. “Green buildings provide more fresh air and natural light and things like natural building materials and having showers and bike racks for staff who cycle to work provide health as well as environmental benefits. Healthier staff take less sick days, are more productive and stay longer.”
Amenities: “The modern day worker has a busy life, therefore easy access to a wide variety of amenities has become an important consideration when deciding on the right workplace location,” says Budd. “Most people spend more of their waking hours in the office than they do in their own homes during the working week. It’s not surprising then that someone with their pick
of job prospects will give similar consideration to the location of their workplace as they do to their house.”
Never underestimate the power of food, says Budd. Staff prefer to be somewhere with a range of options for lunch, client meetings and refreshments. The amenities check list also includes access to good shops, childcare, fitness centres, dry cleaning, hair salons, pharmacies, medical centres and banks. “Time is precious so the efficiencies these types of amenities bring to workers’ day-to-day lives is priceless.”
Budd says developers, particularly of larger scale office complexes, are building these sorts of facilities into their projects. A case in point is the BDO Centre which encompasses a variety of “convenience” retailers which draw much of their business from the more than 1,500 people working in the office complex. NZME also operates its radio stations from the ground floor with see-through windows providing a connection and plenty of brand profile to passing pedestrians.
Technology: Access to the latest technology, and the increased flexibility and productivity that a wireless working environment provides, is also a major attraction of new premises, says Budd. “Increasing numbers of new buildings also now have their own apps to help their occupants to do things like order coffee or food and book meeting spaces either from within or outside the property. They can also automate receipts and provide a calendar of events that are on in the building.”
These new buildings are not just for big businesses, says Budd. “Benefits are equally as applicable and accessible to SMEs. An example of this is a new flagship Grid Akl building under construction in Auckland’s Wynyard Quarter which will provide a co-working environment for smaller, entrepreneurial companies. With an increasing supply of new office premises coming on board, cost savings, healthy, productive staff and access to world-class amenities and technology are within reach of more businesses.”