We are a consultancy firm and our current
office is in CBD location. As our lease expires
soon our management is considering secondary
market options where the occupancy costs
are more attractive — what should we do?
If your company needs to be in a central business
district (CBD), then you should remain there and look
at how you occupy space in order to minimise costs.
You should look at lease events as opportunities to
deliver change and savings. This can be achieved by
working on increasing utilisation rather than density
of occupation. You can create different types of
working environments as many work tasks can be
completed from remote sites like individuals’ homes,
coffee shops, client sites or third party sites.
Nevertheless, you should think about your workplace
strategy, not only in relation to minimising costs, but
also as a positive starting point that is about providing
choice to your employees, enhancing your productivity
and creativity, and driving collaboration and efficiency.
Moreover, if your clients and business partners are located
in prime locations and face-to-face contact relations is
an important part of your business, than the secondary
locations may not give you the same advantages.
If you want to retain your workforce and source
the best talent in the market, CBD locations offer
more opportunities. In previous years it was all
about ‘location, location, location.’ This is now
changing towards ‘talent, talent, talent.’ Currently,
only the CBD sub-market can combine the two.
Exceptions of this rule are the city fringe locations that
offer occupiers a choice between high quality office space
in new developments and good quality space in second-
hand buildings. In both cases the prime location element
is still achievable and rental costs can be minimised
up to 20-30% as opposed to CBD opportunities.
To summarise, there are always ways to make savings
as long as the location, talent, and quality are correctly
prioritised and in line with your company’s business needs.
I have a meeting with my IT team, who are
responsible for data centres, and I would like to
bring as much value to them as possible. What
are the key issues that I should be aware of?
In a world where the Chief Information Office (CIO) has
control over a data centre portfolio, it is essential for the
in-house real estate team to understand the property
function of a data centre. The most fundamental issue
concerns the ‘floor area versus power’ equation.
Just because a data centre physically has vacant
accommodation, this does not necessarily mean
that the facility has additional capacity. It is
electrical power supply rather than physical space
that is the key asset in a world that is moving away
from being valued on a ‘GBP per sq ft’ basis and
increasingly towards a ‘GBP per kilowatt’ basis.
An appropriate supply of electricity is required to power
the specific type of equipment located in a data hall. This
power feeds not only the IT equipment, which gets hot,
but also the M&E cooling equipment that maintains the
IT equipment at a temperature that allows it to operate.
An excess of power gives a data centre manager
additional strategic options. It provides longevity as
the facility is unlikely to outgrow its power supply, it
assists financing the huge capital expenditure invested
to keep a data centre up to date and operational.
It also gives the data centre manager the ability to
introduce state of the art higher density equipment
that will drive further computing efficiencies. This
in turn allows the facility to run at its optimum,
keeping running costs to a minimum.
Not enough power, results in vacant accommodation
that cannot be used. This increases operational running
costs as the facility will not be operating efficiently and
it places limitations and restrictions on the IT equipment
that can be deployed. Ultimately the life span of the
property will be restricted which will lead to issues
concerning decommissioning and relocation, which in
the data centre world has a two to three year lead in.
Data centres consume a huge amount of power,
many the equivalent of a medium sized town, such as
Leicester, and because of this a data centre’s location
is largely dictated to by its access to a redundant
and resilient power supply or indeed supplies.
When a CIO says that they need more capacity
in their data centre, this does not necessarily
mean more floor area. The floor area versus
power equation needs to be considered in full.
Your questions answered
DTZ’s Richard Golding, Head of Occupier Services UK, answers your occupier real estate questions.
For further information on any of these questions, and to
submit your own, contact:
RICHARD GOLDING
Head of Occupier Services, UK
+44 (0)20 3296 3347
34 DTZ | In Situ
