Doug Henry, Managing Director of Occupier Services Australia for Colliers, says that over a number of years now Colliers has been working hard to continually evolve its Occupier Services capability across all property sectors.
“We’ve created a whole series of services attached to the needs of occupiers, ranging from Workplace Management Services – where we have a large number of our people around Australia looking after our occupier client’s workplace’s– right through to portfolio management and specialised tenant advisory services,” he says.
Peter Evans, National Director, Occupier Services for Colliers, adds that during his 17 years on the occupier side of the business, the warehousing and logistics real estate market has become more technical, and the total capital investment occupiers are making has changed dramatically. We’re now seeing warehouses being constructed that are 20,30 or 40,000 square metres and upwards, which was unheard of five years ago.
But it isn’t only the sizes of the warehouses that has changed, it’s the capital expenditure that go along with them that has transformed the market, Peter says.
“We’re finding on many occasions, the capital expenditure within the warehouse outweighs the actual cost of the buildings themselves,” he says. “In terms of getting the capital expenditure approved, the property sector traditionally comes in at the end of the process. This is why we have partnered with Pollen Consulting Group, so they can provide independent factual advice to guide logistics and warehousing solutions. The advice may well be that the occupier doesn’t actually need to move to a new property.”
“The purpose of the partnership with Pollen is to have a pure consultancy based model, so we can provide appropriate information and work together collaboratively to find for the right solution for the occupier,” he says.
Paul Eastwood, CEO of Pollen Consulting Group, observes similar trends to those identified by Peter, while coming at the issue from a slightly different perspective.
“I think warehouses used to be viewed as an almost necessary evil,” Paul says. “They were something often relegated to the end when planning out what you’re going to do. Everybody had them, but there wasn’t that much care for them, sitting as they did at the end process.”
Paul says that the logistics and supply chain distribution model has changed such it can be a competitive advantage for businesses – owing to increased complexity around where and when businesses want goods supplied.
“Previously, I think supply chains were perceived as disconnected from the operational core of the business, whereas now there’s a blurring of manufacturing and warehouses,” he says. “You can almost spend as much capital on your warehouse as you can in your factory.”
Paul says that the relationship with Colliers grew out of the latter serving as something of an informal sounding board on property for Pollen. As the emphasis on property has grown, Paul says Colliers became increasingly important as a means of leveraging property information to provide the best advice to Pollen’s clients.
So, it was a natural progression for Colliers and Pollen to formalise their working relationship. “I’m pretty open to saying that this is a big opportunity for Pollen,” says Paul. “Colliers’ network is a lot broader than ours in the industrial space. It is an opportunity for us to use our capabilities with a broad spectrum of clients and tap into a network that allows us to give the best possible advice.”
Doug Henry says that the Occupier Services side of Colliers benefits from the specialist advice of Pollen because – working as they do for occupiers and not landlords – the long-term viability of Colliers’ Occupier Services is predicated on maintaining the trust of occupiers and independence from landlords’ interests.
In practice, Paul says, Pollen and Colliers work separately as businesses but in tandem towards a mutual goal.
“A good example might be a manufacturing facility project – and this is an exciting area because we don’t just do warehouses, but manufacturing sites as well,” says Paul. “Pollen might get involved in a business case for a new manufacturing facility. We’re asked to see if it all stacks up. So, we’d help them do the business analysis. What’s it going to save them? What’s the capital cost from equipment and machines? What are the one-off costs to consolidate and close the site from a personnel side?
“Then we work with Colliers for advice on locations, innovations, inputs and other insights. We then help that business put a business case together to take to the board for approval. Then Colliers manage the execution from a property side, while we support the business from a consultancy perspective on transformation, supply chain, and operations. From there, Colliers’ and Pollen’s work blends together to run as a single project.”
Published originally for MHD magazine: MHD September 2021 by Prime Creative Media – issue