18 months prior to lease expiry, DB Thermal / SPX appointed 5th Avenue Properties to undertake a study of the real estate market in the Woodmead area of Sandton, where they occupied 2,500m² of office space in a dated building. In order to determine the optimal real estate solution for their business.
Our brief was to focus on the Woodmead area and undertake a market survey to determine all available relocation options and conduct a “stay vs. go” analysis on the offer to renew from their existing landlord. DB Thermal / SPX wanted to achieve cost savings and obtain additional space in order to expand their operations and take on additional headcount as and when required.
5th Avenue engaged the market and short listed a number of buildings in the preferred area. We also recommended that space planners were appointed to conduct an analysis on how DB Thermal / SPX worked and what efficiency gains could be achieved by moving to an open plan office environment from their current cellular office configuration.
The space planning study recommended that an open plan office environment would be conducive to enhancing the working environment and would achieve a space and cost saving of approximately 20% from their existing lease. In addition, it would give DB Thermal / SPX enough space to satisfy their expansion requirements for the foreseeable future without increasing their footprint.
A 2,000m² property in Woodlands Office Park emerged as the primary relocation option. During the negotiations it was determined that the I.T. costs that would be incurred to relocate, would prove to be prohibitive and would result in a higher NPV than the stay and renew option even though rentals would be reduced due the space savings that could be achieved, from moving to a smaller footprint.
5th Avenue negotiated an additional tenant fit out allowance in order to offset these costs. The solution was presented both locally and internationally and approval was given to relocate based on the efficiency gains, expansion space, a brand new building and cost savings of approximately 20%.