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Consolidating for the Future May 1, 2009
To resolve the issue of fragmented staff, Telecom recently made a bold move. In a huge commitment of planning, money and time, it will develop two properties in Auckland and Wellington, which combined will house up to 4,200 staff.
Which raises the question: in times of economic uncertainty, what drives Telecom, and other influential New Zealand companies, to undertake such massive investments in property?
Telecom Property Manager Jim Robb has one compelling answer. “The challenge is to look beyond the direct cost of a property, and to look at the value it can bring to the organisation. It’s about the value that the business derives from having its people together. It enables us to meet, collaborate, form friendships, and work together for the ultimate benefit of our customers. It will position companies better for when the economy really gets rocking again.
“These developments represent a commitment to our staff, our shareholders and our customers. We want to deliver something which, in our dreams, is a destination and something we can all be proud of.”
Colliers Commercial Leasing Manager James MacCormick agrees with the value of such a move: “We’re seeing what we call ‘rooftop consolidation’, where you get organisations in a number of different buildings, trying to pull people under fewer roofs. A good example of that is GE Money. They’ve recently moved into GE Plaza, amalgamating nine separate offices under one roof, so now they don’t have the same duplication of common areas like receptions and meeting rooms, or the downtime for staff travelling between locations ... it’s part of a worldwide trend.”
His colleague Jim Pinson, Executive Director of Colliers International, Wellington, believes quality premises are key for corporations to win what he terms “the war for talent”.
“Now, the graduates – the young superstars – they need to know that the building they’re going into is a good building to work in. And they also want to know it’s environmentally friendly,” Jim Pinson says.
Smart companies can also use their building to market their brand, James MacCormick adds, which is vital for attracting the best talent.
Jim Pinson views recent activity as a cyclical necessity: "A lot of people are coming out of properties at the end of their useful lives." While investment in modern buildings benefits staff and communities, he believes it's also smart business. "Property costs, as an overall percentage of your spending is around 10 per cent. The big spend for companies is on staff ... so there's no point in not getting it right."
The cyclical need for refurbishment will always drive change, adds James MacCormick. “People are still focusing on improving the quality of accommodation. A lot of the existing buildings in the Auckland market were built in the 80s – many have smaller floorplates, which aren’t efficient when housing big companies.”
Despite the official recession, professional services firm Ernst & Young has signed up to be an anchor tenant in the new $200 million East Building being constructed in the Britomart; its first move in 20 years. The firm will relocate its entire 500 strong team, taking advantage of more efficient floor plans in its consolidation. Westpac will move its contact and operation centre into the adjoining Charter House in 2011.
The proximity to the Britomart transport hub was a major factor in Ernst & Young’s decision. Another new Auckland development, Carlaw Park, can expect sound tenancy, partly due to public and private transport facilities and what James MacCormick calls “an x-factor location”, nestled between the Domain, Parnell and the CBD. Jim Robb also notes that transport accessibility plays a huge part in the sustainability equation, with Telecom conducting a detailed demographic study to determine locations based on its ideal outcome of one-ride on public transport.
New locations also enable companies to realise new innovations. The Telecom properties will showcase their technological prowess in action: with both buildings also housing flagship Telecom stores. In Auckland, an Interactive Technology Experience Centre is planned, and Jim Robb is thrilled at it's potential. “We intend it to be a drawcard for school visits, university seminars, industry experts – a ‘must see attraction’ – that’s our goal.”
So despite uncertainty, it seems there will always be good reasons to keep moving: for brand, for sustainability, for efficiency and for a happier, more productive staff culture. Not to mention a solid future bottom line.