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The Issues
In a period when the marketing research industry had
surged in growth, Maritz Research had emerged as a
leader in a global market. Revenues had increased
steadily, and expansion into international markets
was critical to the corporate strategy.
The Market Research Business was established in the
UK in 1981 and as part of the Maritz global proposition,
gained prominence as one of Europe’s leading
market research agencies, employing 150 full time
staff with 77 researchers. Since 1981, the company
had undertaken over 12,000 projects in 67 different
markets and turnover generated for 1998/1999 was around
£18 million.
In order to expand further, there was a need to invest
in new products, people and an enhanced corporate
identity, although costs still needed to be kept under
control. Whilst the firm benefited from a Central
London location with a favourable rent, their property
portfolio in general was inappropriately spread across
a number of disparate
locations resulting in workforce inefficiency and
numerous management headaches.
Seventeen months before the Lease Expiry of their
Central London offices the Chief Executive, Laurence
Curtis reviewed the group business strategy and decided
to appoint an external property adviser to guide the
business as it reached a watershed in development.
Our Role
• We
were asked to guide our client in order to develop
a formal strategy for the UK property portfolio and
specifically to advise on the group implications of
the forthcoming lease expiry of the London Head Office.
• We immediately undertook a business unit profile
aimed at identifying primary goals, functions, and
services provided and reviewed management issues like
attracting and retaining appropriate staff, work place
solutions, the impact on productivity and the focus
of location in relation to servicing clients effectively.
• Head count expectations for full and part
time staff were requested from the business unit managers,
forecasting from 6 months through to 5 years and interviews
were conducted with senior management.
•
We were then able to assimilate all our findings into
a forecasted occupancy report which included some
interesting insights:
• 64% of employees
were prepared to travel for an hour or more to get
to work.
• 34% of employees travelled by
underground to work.
• Over a three year
period staffing figures would increase from 240 to
350 individuals with accommodation requirements increasing
from
36,000 to 53,000 sqft over a 5 year period.
Our Solution
• Although
current offices in London were comfortable, they would
not be able to accommodate growth rates forecast.
Given this, the business decided to pursue relocation.
• However, whilst we identified a range of potential
relocation options, our consultation with the various
divisions and analysis of property market trends led
us to advise against relocation in the short term.
In
our opinion, the risks and potential disruption to
business far outweighed any gains from assimilating
the group within a single office.
• Instead,
we advised on taking short term flexible space next
to the existing London offices to deal with potential
overspill and set about moving the various break clauses
for the other properties to provide more time to facilitate
a comprehensive solution.
The Results
• In real terms the deal structured represented
a 40% / 50% discount in rental terms to current market
levels, releasing approximately £1 million in
cash. |
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