Supporting Business Leaders in Real-Estate Decisions
For companies in Slovenia, making informed decisions about their office space is a difficult task. Typically, there are no estate managers in Slovenian companies, and the job normally goes to someone ill-equipped with little relevant experience, who struggles to make the right decision. Most office buildings in Ljubljana are outdated; there are few Class A buildings, and out of those limited options, most are fully occupied.
There are good reasons to upgrade office space. Millennials are turning down jobs because their potential employers' offices do not live up to their expectations. Employees need to feel valued in a work environment that enables them to be their best. They expect an office that is cool in summer, warm in winter, and where their basic needs are met.
There is good news that there are solutions to these challenges.
When a lease expiry approaches, the first step is to consider whether the team is happy where they are, and if not, address the alternatives. The process begins by taking a detailed brief of your requirements, and most importantly, of the desired working locations within easy access of all employees. Business premises must meet the requirements of the company; they must encourage productivity and increase employee engagement. High-performance office space is not only a change for employees, but an investment in the company's future.
Next, the specifics of your company should be analysed to find the best options on the market. These results are drawn up in a long list for discussion with the client, and sometimes viewings are arranged with the local team. The list is shortened, and then the financial analysis begins with a Stay Vs. Go analysis. In this process, all of the occupancy costs over the length of the lease are broken down. This includes rent, service charges, parking costs, fit out investment, cost of relocation, and anything else, and the current workplace can be compared with other options. The overall cost of occupation is important but is not the only relevant factor in the decision to move. A client recently moved from a Class B to a Class A building where the occupancy costs were higher but considered it worthwhile as employees had been complaining for a while about the previous building's poor drainage and badly designed air conditioning.
Most global companies rent their office space, but Slovenian clients lean towards ownership. This is partly a legacy from the days of socialism, but also from the credit boom in the early 2000s when bank finance was cheap and easily available. Today, most companies accept that those funds can be put to better use rather than acquiring real estate; indeed, renting office space can be seen as an additional credit line. Furthermore, instead of companies handling the property administration themselves, professional landlords have mastered the skills of managing office properties. Meanwhile, renting allows greater flexibility for companies desiring a move.
Most companies are under pressure from their shareholders to do more to help the environment so there is an increasing demand for green buildings. Unfortunately, this is problematic in Slovenia; there is only one green certified office building so far, however, in keeping with the demand there are more in the pipeline.
Quality office space is becoming increasingly important in the struggle to attract and retain talent in the workplace. Assigned workstations could become offices of the past as many companies are moving to activity-based working where they have access to various spaces for different tasks. Within the next few years, offices will offer employees a better level of service provided by concierges, with hospitality grade facilities on site.
Relocating or upgrading existing office space is a big undertaking, and making mistakes is expensive. Therefore, it is advisable to get help from a broker experienced in providing tenant representation services who has the skills to recommend bespoke options. Likewise, contact an architect or workplace consultant who can tailor the space according to requirements.
Jacqueline Stuart will give a practical, how-to presentation on supporting business leaders in real-estate decisions at WDC21.
The conference is taking place live and online at Rikli Balance Hotel in Bled on September 30 this year. For more information or to get a ticket visit WorkplaceDesign.si.
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