30-68% Savings
Real Estate Costs
ON AVERAGE, ORGANISATIONS CURRENTLY UTILISING FLEXSPACE ALSO CITE LOWER COMMERCIAL REAL ESTATE COSTS (AS A % OF BUSINESS REVENUE).
Over a 2 - 5 year period businesses can experience a significant saving when compared to setting up their own office.
When moving into a FlexSpace environment there is normally a single cost per seat at the end of every month to be paid to the operator of the space which is all inclusive of a range of services, leasing costs, space setup costs and other sundry items.
CAPITAL EXPENDITURE
FlexSpace = $0
A Manged Workplace Solution from WERKEDGE is just that, everything si done for you and included in our agreement.
Your Own Premises = $$$
When moving into your won premises 99% of the time there are not fit for purpose. So you need to set up your own IT systems, you need to build some walls, buy new furniture.
Items that need to be considered as upfront capital expenditure that need to be purchased at the outset and then depreciated over time include but not limited to:
Lease Legal Costs
Insurance
Energy & Outgoing Costs
Sundry Daily Kitchen costs
Cleaning
Fit out Costs to setup office walls, furniture and other
IT Hardware purchase
IT Setup
IT Maintenance
(For a proper comparison we have excluded personal computer systems, specialist systems, screens, pens, paper, etc)
Savings Snapshot
Firstly, the base rental is lower – according to PALAMIR research, a 38-person commercial office in Adelaide CBD would currently cost $280,000 per annum for 500 sqm (13 sqm per person) inclusive of outgoings (with a net rental of $425/sqm).
On the other hand, a private 38-person office in an A-Grade FlexSpace facility would cost $228,000 in rent equivalent per annum.
Even more significant cost savings come through lower fit-out costs and outgoings. In a FlexSpace facility or a shared office, the fitout is pre-existing and the costs of internet, electricity, outgoings, insurance, receptionists, cleaning, technology and so on are included in the rental fee.
So we have calculated these all inclusive costs in a 3-year commercial lease, with estimated savings for you:
LEASE YOUR OWN (Cumulative figures)
Year 1 - $ 561,000
Year 2 - $ 1,123,000
Year 3 - $ 1,685,000
WERKEDGE (Cumulative figures)
Year 1 - $ 228,000
Year 2 - $ 456,000
Year 3 - $ 684,000
(Data available upon request)
This takes into account the longevity of business and leases and shows how long leases have inherent long term costs as opposed to a fully managed FlexSpace experience (further detail below).
BACKGROUND
A partnership between WERKEDGE and PALAMIR has developed detailed data analysis comparisons in relation to holistic operational and capital costs over the full life of leasing periods for different size premises and different grades as it relates in Australia.
ABOUT PALAMIR
PALAMIR is a multi-disciplined Consulting Firm that has a wealth of experience across both the physical and digital worlds. PALAMIR combines its experience to bring the best of both words as it specialises in project management and big data analysis. PALAMIR analyses data for feasibility analysis; project management; live 3D BIM models for Buildings and Cities; Digital Twin applications; IIoT integrations, and highly accurate and complex 3D spatial analyses for smart buildings sand smart cities. For further information, visit www.palamir.com.
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