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Case Study

Vero

Property

Vero Insurance New Zealand Limited  together with Suncorp Wealth Management and Asteron occupy 11,600 sqm of office accommodation across nine and half floors in Vero Centre, Shortland Street. Their existing leases expire in 2012.

Key Issues

  • With rent reviews due in December 2008 and March 2009, and significant rental growth over the previous period,  Vero wished to consider their longer term position and review their options for future accommodation.
  • Accommodation and capital costs, amount and efficient use of floor space, branding and lease flexibility were key considerations in assessing future operational needs.
  • Investigations into the market indicated a number of options being available now and in 2012 upon lease expiry.

Jones Lang LaSalle Approach

  • Jones Lang LaSalle undertook a detailed analysis of the known available options and reported on likely future availability having researched potential tenant movement following future expiries.
  • Jones Lang LaSalle advised on prevailing market conditions and using research forecasts commented on future market scenarios.
  • A financial analysis detailing costs to stay put, restructure

     

    the existing lease or relocate was presented by Jones Lang LaSalle and recommendations made.
  • Vero was able to make a reasoned decision and identify the current premises as suitable for their ongoing operational requirements under a new lease structure.
  • Jones Lang LaSalle helped create leverage to negotiate a restructure of the existing leases to support all of Vero ’s future operational requirements.

Outcome

  • The existing leases were varied allowing the release of two floors and associated car parks in a phased exit with relaxation on reinstatement.
  • The current rent review date was waived to enable a new lease commencement date aligned across all leases.
  • Negotiation of a new 9 year lease term with expansion opportunities offered flexibility at a time of uncertainty in the market.
  • The Landlord agreed to help fund improvements to th

     

    e remaining floors to allow an easy transition from the surplus floors.
  • Vero received the benefit of a phased rental holiday.

“Any doubt Vero had to using an advisor to assist us was quickly overcome when we realised the huge value that JLL brought to the table in terms of market knowledge, research and negotiation skills. Working in partnership, not only did we achieve a great outcome for our business in a difficult market; we achieved it in an agreed timeframe and maintained our solid relationship with the landlord. Thanks Caroline for all your hard work!”

Sebastian Moir – Vero New Zealand Procurement & Supply Manager

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