Project References : Commercial Case studies
Ernst and Young
Since Ernst and Young started their operations in Shenzhen, they had always been based in the Shenzhen Developing Center.
The Challenge
Due to continual business expansion over the past few years, the company had been renting several different units in the building. This situation lasted till 2004, when the Ernst & Young decided to consolidate their Shenzhen operations in one location. Unfortunately, Ernst & Young had another three years till the end of their lease agreement, which meant that they would be penalised if they broke the current contract and moved elsewhere. In addition, their current rental per square metre was half that of the rental rate for Grade A office buildings, so it would not be easy to persuade Ernst & Young to move.
The challenge for Savills was to assist Ernst & Young to solve the problem with the current lease agreement and come up with a solution.
Our Strategy
First, we tried to find new tenants to take over the space that would be vacated by Ernst & Young and negotiated with the landlord to minimise the losses to the company.
Savills then provided market research findings indicating that other international auditing firms also rented offices at the current market rental. As such, E&Y should be able to afford a similar budget.
Savills realised that China Resources Building was a good choice. Except for the move-in time, other conditions matched Ernst & Young's requirements. As such, we contacted the landlord and negotiated with the landlord for better terms, in the form of free parking lots, discount in property management fee, and the lowest fee for provision of 24 hour air-conditioning in the building.
The Outcome
Ernst & Young successfully leased two floors in China Resources Building, and also solved the problems with the previous contract and the move-in time.
CONTACT
Woody Lam - Managing Director (Southern China)
WLam@Savills.com.hk
+8620 8132 0109 0107 - Guangzhou +86755 2598 0778 - Shenzhen