CoreNet Discovery Forum - Bank of New Zealand Office Portfolio Strategy A Virtual Campus 2 August 2010
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CoreNet Discovery Forum Bank of New Zealand Office Portfolio Strategy A Virtual Campus 2 August 2010 Garry Pellett – Head of Properties garry_pellett@bnz.co.nz
A Bit Like Kissing Your Sister?
1
The Little Bank That Did
A Journey That Will Never End
Three Into One Does Go –
The BNZ Story
2
Presentation Outline
1. Some basic metrics about Bank of New
Zealand
2. The Process – Strategy and Delivery
3. What We have Learnt
4. What does it look like
5. Going Feral
3
The Little Bank That Did
BNZ – Some Metrics
4
BNZ Properties
Stores 178 91,500 m2
Offices 10 50,275 m2
Property Team 7 plus GP
Outsourced model
Darroch – Property and Facilities Management
Project Management – Opus & RCP
Contractors, as required
Business:
Cost to Income 45%
5
The Little Bank That Did
A Journey That Will Never End
The Strategy
6
The Methodology
BUSINESS NEED UNCERTAINTY/GREY AREAS CONSTRAINT
S
Discovery Role of Akld/Wgtn Soft Business
80 Queen mix Benefits
Staff P&L Impact
General Risk
Managers CAPEX
Snr Managers
Business Drivers
Vision Current Portfolio
Strategy
Office Portfolio Strategy Expiry Profile
Brand
Culture Exit Costs
Workplac
e
Vision
Market Factors
Current Issues
Best Practice Opportunity
Density Best Fit Timing/
User Types Lead Times
KEY DRIVERS STRATEGY CONSTRAINT7
Office Portfolio Strategy Aligns With Core BNZ Strategy
BNZ OFFICE WORKPLACE REAL ESTATE
PORTFOLIO MEASURES OF
KEY DRIVERS
VISION & STRATEGY DESIGN STRATEGY SUCCESS
STRATEGIES OBJECTIVES
Driven by Property Professional and Exit under Increased Brand
Leading Financial functional spaces performing
business Brand Image awareness
Services Company - premises
objectives Regular floor plates
Quality 12-1500m2 1:15 occup. density
Deliver Solutions Acceptable Consolidate
Location Ave 15m2 per work number of sites P&L targets met
High Performance residual risk
Property Costs setting A or B grade Staff satisfaction
Trusted Optimal financial
Consolidate by space only
Relationships Lease vs Own increased to 95%
solution business styles Podium not “top” 80 Queen St market
Strong/ Roadmap
Technology
98-100% open plan, floor
Sustainable TSR value achieved
People needs based
Create and Group business
Culture and 30-35% grp space units with affinity Occupy consolidated
Leverage Assets Performance A/B grade space only
Supports Large floor plates
Flexibility collaborative and & less floors Churn with negligible
Integration concentrated cost
activity High quality
Risk Management building services Reduced recruitment
Central facilities costs
CBD or fringe only
No barriers / open
stairs
with good access Increased
& amenity ie. 80 productivity
Flexible voice & Queen
data capability in all Average floor plate
spaces Brand key bldgs
where appropriate. size 1,500+
No ownership of Improved risk profile
window space Flexi lease
strategy New generation IT &
Community and
informal spaces Technology security systems
enabled buildings
8
What does this mean…
Existing Future
Excludes Christchurch
Number of Building 10 Number of Buildings: 4
Total Area: 48,282 Total Area: 36,400
Number of Floors : 73 Number of Floors : 21
Ave Floor Plate: 661m2 Ave Floor Plate: 1,733m2
124 Vincent St 80 Queen St
Auckland
125 Queen St Penrose
80 Queen St New Ops Centre
Wellington
BNZ Centre, Contact Centre,
80 Boulcott St
1 Willis St NZ Post
BNZ Centre
New Build
1 Willis Street
BNZ House, Gen-i, Grand Arcade,
50 Manners St Featherston St Willis St 9Program Governance and Engagement
1. Bank-wide Governance
BNZ Board
Sub-Committee
Risk
Committee NZLT
2. Programme
Governance
Office Portfolio CEO
Other PRCs CFO
Steering
Committee COO
(Interdependent Director People
Programs) Director Retail
Director Business
Project Owners
3. Programme Strategic Briefs
Management Other Program Program
Teams Director Best Practice
Consulting
Benchmarking
Team
Docklands Team RCP
Jasmax
Workstream Consulting BNZ T Project
Beca’s
Managers Team Mgr
DLNZ
Bell Gully
Business Chris Hardley
Stakeholders
10The Little Bank That Did
A Journey That Will Never End
Acquisition, Deals And Design
111st - Property selection – evaluation criteria
Key points for decision matrix:
Primary Selection Criteria Most Important Evaluation Criteria
• Location, CBD/CBD perimeter • Modern A/B grade
• No unacceptable historic or competitor • High performance services
association
• Ability to support modern technologies
• Fibre loop access
• Floor plate efficiencies
• Appropriate environment
• Likely morale/satisfaction impact
• Satisfies total space requirement
• Exterior perception/presentation
• Floor plates > 1,000m2
• Environment
• Gross Rent market appropriate
• Access – to public transport/for cars
Four Key Evaluation Categories • Lobby/core efficiency, deep space ratio
• Property Alignment • Delivery risk
• Business Impact • Concentration risk
• Risk
• Financials
12Three Different Developers
BUILDING 80 Queen St Harbour Quays Quay Park
DEVELOPER Multiplex Centreport Manson Developments
COMPANY TYPE Public Listed Local Authority Private Company
Sophisticated Single Building Small Builds
EXPERIENCE (One high rise – ouch)
LAND BNZ Owned Public - Port Company Lease Hold
DA Tower Complex build (2 atria) Low rise (4 level)
15 years 12 years 12 years
LEASE
RENT %pa market 3 yearly %pa
market year 10 including L/H land
RESILIENCE 100% 50% 100%
SUSTAINABILITY √ √ √
13Base Building Agreements
14The Auckland“Deal”
Unusual in that the Bank:
• owned the Land
• held Demolition Resource Consent
• held a Development Resource Consent
Multiplex (now Brookfields) introduced as
Developer, Builder and End Owner
Opportunity to develop under a Joint Venture arrangement
Declared feasibility model inputs negotiation
Introduction of ESD higher objectives
15The Little Bank That Did
A Journey That Will Never End
The Designs – Base Building
16Design Brief – A Partnership Approach
Meet the Bank’s Brand objectives (Not a Banker’s box!)
> Modern
> International
> Iconic even
> Transparent
Floor plate size and geometry (Orthogonal)
Floor plate depths – daylight penetration
Core location – central vs side – central better
Landlord building efficiency in the excellent range NLA 89-93% of GFA
Facilitate Tenant efficiency in the excellent range NUA 92% or more of NLA
Planning grid of 1500mm (we didn’t)
Ceiling height 2900mm (we didn’t)
Low sill heights
17Design Brief – A Partnership Approach
Column placement, regular, inboard vs outboard
Depth of space ratios - % of area within 12m of glazing A grade 55% B35%
Aspect potential the amount of space within 6m of glazing
High services potential area within 6m of services cores 40% or more of NUA is
good
Efficient Building services (overtaken by Green Building Council Ratings)
Building resiliency – built in not tacked on
Data/Telecommunications/Power diverse supply
18BNZ Virtual Campus
Quay Park, Auckland Harbour Quays, Wellington
80 Queen St, Auckland 19The Little Bank That Did
A Journey That Will Never End
The Workplace
20BNZ Strategy link to design
Five key design principles:
Simplification Openness and transparency
• Visible both from outside in and inside
out
Business enablement
Culture • New technology, flexibility and
effectiveness with Kaizen principles
Collaboration and community
• Virtual campus, shared spaces, effective
Revenue business processes
Wellness
• Environment and facilities for healthy
living
Sustainability
• Green Star NZ 5 star rating 21Indicative Floor plan
Central void / Centralised
Informal break out staircase for
areas with furnishings recycling
easy movement facilities
made from recycled / throughout the
Interactive sustainable materials building
whiteboards Kitchen
Kitchen
& built in appliances with
data shows good energy
ratings
Larger floor
plates allowing
for co-location
of teams, and
improved
communication
Ergonomic chairs
and workstations
made from
sustainable
products
Carpet with
sustainable
backing
Centralised areas
for printing &
Window blinds
Quiet rooms available utilities
made from 1 Parents room per
environmentally for concentrated work
/ phone calls building with facilities
friendly product for feeding and
changing babies
22The Little Bank That Did
A Journey That Will Never End
Change Management
23Change Management
• Baseline Measures – difficult to establish
• Change Champions for each business
• Articles – Intranet
• A – Z – a glossary of information and “how to’s”
• Briefings for Change Champions and Staff
• Travel Plans from ARTA – How to get to work
• Postcard – regular intervals
• Q&A
• Site Visits
• Welcome Pack - Ways of Working booklet
24The Little Bank That Did
A Journey That Will Never End
The Greening
25BNZ is part of a bigger, committed, Group
26Monitoring & reporting
Environmental performance across
the NAB Group is monitored by:
> BNZ Executive
> Group Climate Change & Environment
Committee
> Group Risk Management Committee
> The Board
27Carbon neutral – what do we mean?
1 Measure (baseline/inventory)
2 Avoid/replace – switch fuel
3 Reduce energy consumption & travel
4 Offset unavoidable emissions
Monitor 5 Verify & report
Carbon neutral by September 2010 for our defined carbon inventory
28The Green Changes – 4* to 5*
Management Systems
Correctly commissioned heating, ventilation, cooling
and lighting systems
Environmental management plan
Recycling of waste with multiple reporting
Comprehensive building management system
29The Green Changes – 4* to 5*
Indoor Environment Quality
100% improvement on standard ventilation rates
Floor to ceiling glass façade
Open plan layout and staff must work with view to outdoors
Living plant walls
Mix mode air
Zoned Dali and C-bus controlled dimmable lights
Ergonomic furniture made from 90% recyclable material with
end of life cycle Product Stewardship
30The Green Changes – 4* to 5*
Energy
Deep natural light penetration
Movement sensor lights
Energy efficient appliances
Reuse of abundant energy, for example the lifts
31The Green Changes – 4* to 5*
Water
Rainwater harvesting
Hi-tech water metering
Waterless urinals
Low flow showers
Low volume and dual flush toilets
32The Green Changes – 4* to 5*
Materials
Sustainable timber used Victorian Ash and Bamboo
Environmentally friendly floor coverings including basalt,
recycled carpet, recycled rubber flooring
Low VOC adhesives and sealants
Environmental Choice paint and gib lining
Use of wool fabrics and acoustic absorbent panelling
PVC free blinds and window film
Eco-hush foam in atria roof, cantilever meeting room slab soffits,
balustrades
33The Green Changes – 4* to 5*
Transport
Close to city bus and train transport hub
Cycle facilities with drying racks
Showers with ironing facilities
Lockers
Car pooling
Motorcycle free parking
34The Green Changes – 4* to 5*
Land use and ecology
Enhanced environmental planting and landscaping with NZ
natives
“Swale” drain sustainable water management system
Close to harbour and green outdoors
Recycling of construction building waste
Emissions
Environmentally friendly refrigerants and insulation
Hi-tech monitoring systems including CO2 air quality
35The Little Bank That Did
A Journey That Will Never End
So What Have We Learnt?
36Essential Elements & Observations
Support from the top – CEO
A willing partner – BMPX and then Deloittes in Auckland
Consultant Team – Competent and Cooperative, not competitive
Cost of being first – Industry maturity – cost of risk – supply chain comprehension
A good sized cheque book helps! 80 Queen Street about 4% additional cost – 4
star to 5 star has to be commercially acceptable to the CEO of each entity
37Essential Elements & Observations
Cost of compliance – just the fitout >$100,000 x 3 to protect process integrity
Tool development – work in progress - industry involvement
Commitment to all the Green Tool steps – it’s not a marketing tool
DA documentation – this all new to the legal profession too
KPIs – productivity – quotes of 5 -35% - how do you measure it?
38Challenges - Green
1. The digital dependency
Fine tuning
Reporting language
2. Landlord Tenant interpretation of green leases
There are obligations on both parties
39Challenges
3. Soft finishes – VOC’s
4. Cleaning
Day cleaners
Dishwashers
5. Water
Too little or too much
6. Waste
Collection and recording
Food scraps
40The Little Bank That Did
A Journey That Will Never End
So What Does It Look Like?
41Quay Park
4243
44
45
46
47
Harbour Quays Wellington
4849
50
51
52
53
80 QUEEN STREET
5455
56
57
58
59
The Little Bank That Did A Journey That Never Ends So What Do Our People Think? FANTASTIC!!!!!!! !! 60
Satisfaction comparison of work space, Pre and
Post Quay Park Move
90% Improvements in Workspace Rating (% rating as Excellent or Very Good)
80% 77%
72% 70% 70% 72%
70% 66% 65%
63%
60% 57% 58%
50%
40% 35%
28% 29%
30% 25%
22% 24%
22%
19% 19%
20% 17%
10%
0%
Spaces for ad Spaces where Availability of Informal Areas for Training Areas for Areas where Small meeting Large meeting
hoc / not you can break rooms when meeting creative work facilities confidential teams can rooms rooms
booked out from work you need them settings in teams discussions productively
meetings work together
Pre-Relocation Quay Park
61Satisfaction Comparison of Image and Layout,
Pre and Post Quay Park Move
Improvements in Image and Layout Rating (% rating as Excellent or Very
Good)
90%
80% 75% 74%
69% 71%
68% 69%
70%
60%
50%
40%
31%
30%
21%
19% 19%
20%
11%
9%
10%
0%
Environmental sustainable Interior decor of the office A vibrant place to work Encourage constructive A space that encourages Open space with good
design behaviours interaction lines of sight
Pre-Relocation Quay Park
62Satisfaction comparison of Workspace, Pre
versus Post Harbour Quays Move
Im provem entsin W orkspace Rating (% rating asExcellentorVery Good)
100%
86%
80%
73% 72%
69%
65% 64% 63%
56%
60%
53%
51%
40%
26% 26%
20% 16%
15% 14%
12% 11%
10% 10% 9%
0%
Largem eeting Inform al Spacesw here Sm allm eeting Areasfor Training Areasw here Areasfor Spacesforad Availability of
room s m eeting you can break room s confidential facilities team scan creativew ork hoc/ not room sw hen
settings outfrom w ork discussions productively in team s booked you need them
w ork together m eetings
Pre-Relocation Post-Relocation
63
Base: Pre-Relocation survey N=615, Post-Satisfaction comparison of Image & Layout,
Pre versus Post Harbour Quays Move
Im provem entsin Im age & LayoutRating (% rating asExcellentorVery Good)
100%
83% 82% 82%
79%
80% 76% 74%
60%
40%
20%
20%
11% 12%
9%
6% 5%
0%
Open space with good Environm ental A vibrantplace to work A space that Interiordecorofthe Encourage constructive
linesofsight sustainable design encouragesinteraction office behaviours
Pre-Relocation Post-Relocation
64
Base: Pre-Relocation survey N=615, Post-Workspace Satisfaction– Comparison of Pre
versus Post 80 Queen Street Move
Im provem entsin W orkspace Rating (% rating asExcellentorVery Good)
80%
71%
61%
58%
60% 56% 55%
53%
43% 41%
39%
40%
33%
23%
19%
20%
10% 11%
9% 8% 9%
7% 7% 8%
0%
Largem eeting Sm allm eeting Inform al Spacesw here Areasfor Areasw here Areasfor Training Spacesforad Availability of
room s room s m eeting you can break confidential team scan creativew ork facilities hoc/ not room sw hen
settings outfrom w ork discussions productively in team s booked you need them
w ork together m eetings
Pre-Relocation Post-Relocation
65
Base: Pre-Relocation survey N=295, Post-Image & Layout Satisfaction– Comparison of
Pre versus Post 80 Queen Street Move
Im provem entsin Im age & LayoutRating (% rating asExcellentorVery Good)
80%
67%
65%
60% 59%
60% 59%
55%
40%
20% 16%
10%
8% 7%
2% 3%
0%
Environm ental Open space with good A space that A vibrantplace to work Interiordecorofthe Encourage constructive
sustainable design linesofsight encouragesinteraction office behaviours
Pre-Relocation Post-Relocation
66
Base: Pre-Relocation survey N=295, Post-Waste Generation and Recycling
14.0 100.0%
90.0%
12.0
80.0%
10.0 70.0%
Kg Waste / FTE
Recycling Rate
60.0%
8.0
50.0%
6.0
40.0%
4.0 30.0%
20.0%
2.0
10.0%
0.0 0.0%
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
2009/ 10 waste Current recycling rate = 76%
Recycling Rate Target recycling rate = 80%
67The Little Bank That Did
A Journey That Will Never End
But wait, there’s more :
-Going Feral
6869
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Audit Results
No available desks for business or project teams, building is full
• Average desk usage is 70%, allows 30% capacity for flexibility
Meeting rooms are difficult to book and appear unavailable
• 50% of meeting rooms vacant
• 1-10 people rooms popular, larger rooms mostly unused
• Booking behaviour needs addressing, block booked 5 years !!
Project teams have difficulty with physical space alignment with
business teams – Agile Project Delivery Framework
• Business units not consulted and do not understand why
• Business units only want small team doing daily contact
• Project teams need Agile framework to work within
73Audit Results
The workspace is cluttered again, chairs go missing
• Behaviour and attitude need addressing
• Kaizen
Properties helpdesk process is not clear on logging building issues
• Darroch processes being improved and more comms
Some physical areas not used as intended - redesign required
• Jasmax engaged to assess areas
The abuse of meeting rooms and equipment is frustrating and
unacceptable
• Behaviour and attitude need addressing
• Meeting room IT /AV improved re: VC facilities
74Circle back - Alternative Work Place
“A combination of practices and places involving space design and
usage, technology provision and HR policies that allow work to be done
from a variety of settings beyond the traditional office environment.”
Think long term and flexible
No one size fits all, so broadly categorised as:
Assigned: Dedicated seat in building
Unassigned: Drop-in / Touch-down space with reservation method
Mobile Internal: Works in/around the building with no assigned seat
Mobile External: Works outside building in variety of places, eg: satellite office,
home based, traveler
Right Space
Right Technology
Right Processes
75New Ways of Working – Retraining, Again!
Change, Change, Change
Work Practice Work Place
Manager Activity-Based Work Settings
• Embracing flexible work • Workspace types and functionality
• Fostering flexible community • Selecting and reserving space
• Building high performance flexible teams • Workplace protocols
• Enabling effective communication • Workspace services and support
Employee
• Participating in a flexible community Outside of Harbour Quays
• Communication and collaboration • Your workplace requirements
• Managing performance and development • Planning this area
Working without Boundaries • Information security best practices
• Mobility best practices • Managing physical security
• Information security best practices
• Preventing stress and overwork
• Planning ahead
76Questions?
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