Our latest report on the Auckland Office Market puts an occupier/tenant lens on the clutter of property data that the industry loses itself in.
Our aim is to provide a guide on the real costs of leasing new premises – not just rent – by the different office precincts. As ever, each deal is different so specific advice is needed.
We think it's important for businesses to go into the process of considering new premises/leasing office space with eyes wide open. It’s easy to get caught up in the marketing and FOMO hype that the supply side of the industry (landlords, developers and leasing brokers) deliberately curate to 'sell' their solutions into the market. Under-prepared businesses can get sucked into this process.
The six common points of failure we regularly see include:
Running out of time
Leaving the decisions to renew or to lease new premises too late means there are too few options available to create true competitive tension, resulting in sub-optimal commercial terms agreed (too much space, too much rent, insufficient incentives and undefined landlord works and long-term contingent liabilities).
Having a wooly brief
Not spending enough time engaging internally with the leadership team to fully explore the way the business will work/operate in the future means the underlying brief/set of requirements is poorly formed and the decision-making criteria is left to intuition and personal preference, not robust and objective evaluation.
Using an unstructured search and procurement process which results in businesses chasing the options available or 'listed' that may or may not meet the brief, rather than using a strategic procurement process to create competitive tension, to create multiple options (there are always more options than the market wants to tell you) and get the market 'coming to them'.
Thinking the deal is fair
...But unwittingly agreeing to extraordinary costs or unnecessary risks than they could have otherwise achieved, as they have either relied too heavily on supply side advice (like a leasing broker who is conflicted when being paid by the landlord/developer) or have adopted a DIY approach, not appreciating leasing transactions are complicated, with inherent risks and true market information is not fully discoverable.
Underestimating the complexity of a major project
... And therefore not establishing at the outset appropriate governance structures, internal resourcing and external support or putting in place robust reporting and performance regimes and cadence to ensure success.
Missing the opportunity
...By limiting the scope of the project to a 'relocation exercise', not as a business-change initiative, thereby having too narrow a focus and not using the opportunity to consider wider business change opportunities (brand experience, employee experience, technology, sustainability etc.).
Our Auckland team is very active in the market – either directly leading projects or providing covert advice behind the scenes to help clients get ahead of the game and navigate through these issues.
Buildings/transactions and advice we’ve been involved with recently include 136 Fanshawe, Commercial Bay, 188 Quay, 1 Queen, 88 Shortland, 155 Fanshawe Street, 55 Shortland, 45 Queen, 23 Customs E, 104 Fanshawe, 29 Customs W, 660 Great South Road... and many more across wider Auckland.