Good Long Term Planning is King to Getting the Best out of Auckland’s Commercial Property market

As much of Auckland’s residential market is ‘going off’, so too is our commercial property as business confidence grows and space becomes more heavily in demand.

My recent experience in Auckland commercial property demonstrates that the property market is turning in favour of the landlord as we find them firming up on the rentals and reducing tenant incentives to lease space in their buildings.

For organisations that lease their premises, the honeymoon is now almost over. With more tenants chasing less vacant property, no longer can tenants pick and choose where they move to, or drive extraordinary lease deal.

Remember when you could spend a few minutes searching on the internet to find the next great property location for your business? Already those days are gone – to play effectively in this dynamic market we need to be more agile, better prepared and deeply thoughtful of what part property plays in your organisation.

It is not uncommon in New Zealand for major decisions (such as property matters) to be made in off-shore regional offices or headquarters. In a market where those tenants that are slow to make decisions miss out, we have assisted the local management in preparing business cases, market reports and opinions on the commercial aspects of leasing.Our New Zealand clients have found this approach has enabled their off-shore decision makers to make informed decisions faster.

Whether yours is an international corporate with hundreds of staff, a medium sized or smaller organisation, the principles of leasing are the same: Always know what’s in your lease and have a plan for how to deal with anything as it comes up.

As an example, here are four simple questions that you should know the answers to.
• How long until your lease term expires?
• Is it in the next six to twelve months?
• In the next twelve to eighteen months?
• Are there any rights of renewal in the lease?

 

(a) If your lease expires in six to twelve months you will need to take immediate action (see below).
(b) If your lease expires in the next twelve to eighteen months you need to set up a project and start thinking and planning what your business requires from the property. There’s really not much time.
(c) Decide if the organisation should Stay or Go, e.g. renew the lease or Relocate to a new place.
(d) If there are rights of renewal in the lease, the same process should still be carried out. What you find out may be useful if you wish to renegotiate the lease renewal terms and conditions.

Five Point Action Plan
Here is an action plan to get you started on developing the agility and readiness required.

1. Check your lease document to identify the lease expiry date.
2. Identify/ confirm your organisation’s property needs. For starters, ask yourself:  How much space do we really need? and How will the property support our business plan?
3. Get management/ Board support for setting up a project that reports monthly on these critical property matters.
4. It is critical to become smart and agile in this increasingly demanding property environment. Plan to acquire the resources to achieve these.
5. Get professional, independent advice.

I will be happy to assist you to develop the agility and knowledge required. Please feel free to contact me to arrange a get together to discuss your property needs and how to get the best out of the Auckland property market..

Kind regards
Peter Scott
Executive Director
Parallel Directions Ltd
pscott@paralleldirections.co.nz

The Three Wins For Business in Auckland’s Urban Density Battle

The fight for space in Auckland is reaching new heights as the city’s 30 year plan starts to grind through to its final stages.

Without a doubt urban density has been the number one issue as the Auckland Council has drawn up it’s Unitary Plan and put it out to the public for submissions.

Submitters ranging from private individuals to corporations and government departments are all having a lot to say about the pros and cons of denser housing and business districts.

It is a sign of our times. And hard up against it is the increasing hot debate about property values in Auckland.

These issues are not going to end any time soon.

So what’s in it for business?

I believe it is like all looming crises. There is always some great opportunities in tough times through innovation and thinking creatively.

I see three wins for business in property planning.

Win One:

The immediate upside is that property developers, architects  and engineers are already coming up with a wider range of solutions for commercial buildings and workspaces. One size fits all no longer cuts it. The luxury ofgreenfields planning is starting to become a thing of the past.  Brownfield sites and mixed use developments are going to be on the up and up. This provides great opportunities for custom-made solutions that can end up being both more cost effective and good for your brand.

Win Two:

The opportunity to take a close look at what space you really do need and where you should be located. The trends towards hot desking, remote working, doing business online, Just in Time (JIT) strategies about holding stock is revolutionizing our way of thinking about the space we need.  Unless there is a sense of urgency we often put up with premises that are less than ideal.  Resizing or shifting is not always a costly move.

Win Three:

Thinking about being close to home.

The successful businesses of the future will be those that have got their heads around the fast changing dynamics of doing business on the move, having flexible workspaces that will shift and change according to business strategies.

Being in the right place at the right time will enable you to attract the best staff,  and clients.

The real opportunities in Auckland will be around doing some smart thinking about location of work forces and work places. It is not going to be all about the CBD, its fringe and traditional industrial zones. Mixed use developments are on the up and up. One particularly interesting place to watch will be New Lynn.

So if you’re sick of the endless debates about the pros and cons of urban density; think creatively about what opportunities there may be.

New earthquake codes will dramatically alter New Zealand’s urban landscape

Haunting science fiction movies of decaying abandoned city CBDs could become a reality in the wake of new earthquake codes and hiked insurance premiums in New Zealand. I’m not being alarmist here either; there’s a good chance this could become the new reality. There are no two ways about it…

New earthquake codes could see the demise of buildings such as 105 Queen St, Auckland

Haunting science fiction movies of decaying abandoned city CBDs could become a reality in the wake of new earthquake codes and hiked insurance premiums in New Zealand.

I’m not being alarmist here either; there’s a good chance this could become the new reality.

There are no two ways about it… Continue reading “New earthquake codes will dramatically alter New Zealand’s urban landscape”

Arguing the toss at the end of a lease

This is my second blog about the new building surveyor profession in New Zealand. It is having a significant impact on the way building owners are managing commercial leases. I’ve written before about how easy it is for a business to get caught out at the end of a lease by…

Arguing the toss at the end of a leaseThis is my second blog about the new building surveyor profession in New Zealand. It is having a significant impact on the way building owners are managing commercial leases.

I’ve written before about how easy it is for a business to get caught out at the end of a lease by the ‘make good‘ provisions that require a property to be reinstated to how it was at the beginning of a lease.

Continue reading “Arguing the toss at the end of a lease”

Do you know the difference between quantity surveyors, land surveyors and building surveyors?

And why should you care? Most people in New Zealand are aware of quantity surveyors and land surveyors, but there’s a new kid on the block…

Building surveyorsAnd why should you care?

Most people in New Zealand are aware of quantity surveyors and land surveyors, but there’s a new kid on the block… Continue reading “Do you know the difference between quantity surveyors, land surveyors and building surveyors?”

The future is fewer desks and more devices

It’s old news that the number of people working remotely is on the rise. But a new international study has just come out with some startling figures on just how different this will look in a few years time…

The future is fewer desks and more devicesIt’s old news that the number of people working remotely is on the rise. But a new international study has just come out with some startling figures on just how different this will look in a few years time.

Mobile and cloud technology firm Citrix polled a total of 1,900 IT decision makers in 19 countries about what offices will look like in 2020.

What they found is mind blowing…  Continue reading “The future is fewer desks and more devices”

Mounting pressures on commercial landlords will impact tenants

It has been a while since I reported on the state of the property market. Needless to say there has been little to report other than a continuing glut, a trend that is not going to change anytime soon. But the pressures on commercial landlords above and beyond the oversupply are starting to mount…

Commercial landlords sell at lossIt has been a while since I reported on the state of the property market. Needless to say there has been little to report other than a continuing glut, a trend that is not going to change anytime soon.

But the pressures on commercial landlords above and beyond the oversupply are starting to mount.

Continue reading “Mounting pressures on commercial landlords will impact tenants”

The efficiencies of landlord and tenant working together

We hear so much these days about the benefits of collaboration and cooperation, but often it is the theory and not the practice we hear about. I’m involved in the last stages of a great project that…

The efficiencies of landlord and tenant working togetherWe hear so much these days about the benefits of collaboration and cooperation, but often it is the theory and not the practice we hear about.

I’m involved in the last stages of a great project that has been a successful collaboration between a building owner and a significant sized business to achieve a result of mutual benefit. Continue reading “The efficiencies of landlord and tenant working together”

Shared office space starts to take off

A great marketer I know says there is often a real danger of being too far ahead of your time with a great idea. For several years I have talked in this blog about the benefits of shared work space and revolutionising thinking about the time and space we use in an office…

BizDojo - coworking spaceA great marketer I know says there is often a real danger of being too far ahead of your time with a great idea.

For several years I have talked in this blog about the benefits of shared work space and revolutionising thinking about the time and space we use in an office.

Continue reading “Shared office space starts to take off”

Wake-up call for unused office space

We all know the jargon term downsizing. This recent case illustrates the concept of rightsizing. We had an assignment recently that highlighted two very expensive things…

Wake-up call for unused office spaceWe all know the jargon term downsizing. This recent case illustrates the concept of rightsizing.

We had an assignment recently that highlighted two very expensive things…
Continue reading “Wake-up call for unused office space”