Business

Vodafone NZ sub-letting half its offices as more staff work from home

One of New Zealand’s largest corporates wants to sub-let half its Auckland and Christchurch office space because hundreds of staff are working from home.

So many Vodafone NZ staff now don’t come into the office regularly that the business has decided to try to quit about 10,000sq m or 1ha of floorspace, hunting for sub-lessees to fulfil rent commitments which extend out a quarter of a century till 2046 in one case.

Jodie King, chief people officer, said commercial office space needs had changed as a result of the pandemic, so much so that the company no longer needed so many vast floors of offices.

“On average, around half of all staff work from home and this fluctuates depending on the day of the week,” she said.

“As part of our ongoing response to the impacts of Covid-19, and to reflect that the waywe work has changed, Vodafone NZ has just engaged CBRE and Colliers to sub-lease a portion of our office space in Auckland and Christchurch,” King said.

Pre-pandemic, more than 1000 staff and around 500 contractors worked inside Smales Farm’s Innov8 Auckland, 74 Taharota Rd, Takapuna. Vodafone leases around 14,000sq m of this glass-fronted ex-TelstraClear building in the prominent site on the corner of Northcote Rd.

Inquiries made by the Herald indicate it could go for $400/sq m net excluding operating expenses. That means Vodafone could save about $4m annual rent if it succeeds with its leasing campaign.

King said further staff and contractors worked at Innov8 Christchurch, where Vodafone leases around 7000sq m of offices at 213-221 Tuam St.

So how much will it relinquish? That’s flexible.

“We’re willing to discuss exact space with the right business so we’re open to all interest,” King said.

“We also have a number of flexible spaces such as communal desks and large meeting rooms, so we’re comfortable that another business could take up to half of the space in each office and we’ll still have ample desks or working spaces to ensure Vodafone staff have space to work when in the office,” King said.

Covid-19 had changed workplaces. Digital adoption has been turbocharged and other businesses had seen an acceleration of flexible and remote working, King said.

“We believe these changes are here to stay,” she said.

Working from home was more prevalent overseas, with a survey by Gartner showing 82 per cent of respondents intend to permit remote working some of the time as employees return to the workplace and 47 per cent said they intended to allow employees to work remotely full-time, she said.

“While we’ve gradually seen more team members return to the office, on average, just 60 per cent of our Auckland team members are in the office on a busy day and around 50 per cent in Christchurch. This means there are lots of free desks across our floors so we’re aiming to better utilise this space,” she said, referring to sub-letting.

More Vodafone people were applying to work permanently from a regional location, going to head office only when needed, mostly for meetings.

The Takapuna building near the motorway is owned by Smales Farm, while the Christchurch building is owned by PMG Direct Office Fund Trustees, the company said.

Vodafone lease terms are long: Auckland till July 2027 with renewal options till 2037 and Christchurch till August 2028, with renewal options till 2046.

Campbell Pritchard of CBRE confirmed he was engaged to sub-let Vodafone’s Auckland premises.

“The subleasing market is pretty active. A lot of businesses want to leave space, whether under the radar or not, have spoken to agents. This Vodafone one is a bit more public,” Pritchard said.

“A lot of people are trying to move space and Vodafone has a great building in a good location that’s very desirable and Smales as a destination has had very low vacancy,” he said.

The space was yet to be advertised, he said. Pritchard said other corporates were yet to decide on their new space requirements.

“It’s a bit of an unknown at this stage,” he said.

Culum Manson of Mansons TCLM said his family company was developing a new $250m Newmarket building without tenants because leasing inquiries for A-Grade 6-star green-rated space were so strong.

So many tenants want to upgrade to bring staff back to the office, Manson said.

Source: Read Full Article