As New Zealand moves back to some sort of normality, leaders should be thinking of their workplace strategy now, ahead of any leases expiring, whilst also considering the desire by many employees to work from home, at least part of the time.
DB Interiors’ Client Relations Executive, Pierre Ferrandon, says there is a significant opportunity for businesses to downsize their office footprint and reduce lease costs by redesigning the workplace to suit the new ways of working.
Ferrandon says while this downsizing trend is just starting for the majority of organisations, other forward-thinking businesses were already doing so pre-Covid as CFOs addressed the cost of maintaining often under-utilised office spaces.
“Leases are typically five to 10 years for larger companies, therefore depending on where they are in the lease term, they might not be able to downsize for a number of years.”
He says that organisations which are locked into long leases only have the option to try to sub-lease.
Ferrandon says there is currently around 120,000 sqm of sub-lease space available in Auckland’s CBD which is 2.5 times the annual amount of absorption levels, pre-Covid.
“Overall, for companies in this situation it represents close to 2.5 percent of lost output,” he says noting that the cost of real estate is about seven percent of total costs, and that data shows that office space pre-Covid was unoccupied 48 percent of the time with meeting rooms and other enclosed collaboration facilities used at only 12 percent on a seat to headcount ratio.
Ferrandon says too that on average the square metre measurement per employee in Auckland is close to 15m².
“For comparison an efficiently designed office typically achieved a 10m² per headcount ratio pre-Covid, sometimes even lower.”
DB Interiors recently finished a workplace strategy for one of its clients which saw a drop from 1,500m² to 600m² for the same number of staff while improving functionality. This is likely to result in about 60 percent savings in workplace operating costs.
Ferrandon adds that for some companies the opportunity is not to generate savings but instead to relocate to higher quality premises while retaining the same level of workplace cost.
But, he says, the first thing a company must focus on is developing a robust workplace strategy.
“By ‘workplace strategy’ we mean researching and putting parameters around how, when and why people do the work they do, to understand how to best structure the workplace framework around people’s ways of working, rather than trying to fit ways of working around the office.”
Ferrandon says DB Interiors’ process starts with a Blue-Sky Workshop.
“This is a strategy session, generally with the company executives, to help us understand the business’ short, mid-and-long-term objectives.
“We then translate this into workplace metrics across workplace design (foot print, zoning, key functions, budgets, look and feel, technology) and around the property (location(s), building type, amenities, type of lease or purchase, flexible workspace).
“Then we start the search process if it involves a move, or look at onsite refurbishment if the current property is suitable.
“We use data gathered from hundreds of past projects to help translate the objectives the executives have outlined into the design and the property search. Usually, companies start with researching properties and then look at workplace design. It should really be the opposite, you cannot effectively select the right property to buy or lease if you do not know what footprint you need, location, amenities etc.
Ferrandon believes that DB Interiors, which is New Zealand owned and operated, is uniquely placed with its fully integrated approach to service clients from the inception of the workplace strategy to the concept and spatial design, quantity surveying, technical design, project management and site management through to the final delivery.
He says the company’s proven model delivers more quickly for clients and reduces costs by improving efficiencies to provide “workplace solutions that meet business objectives rather than just a place to work from”.
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