Yancoal Australia
Head office relocation –2017
In 2017, Yancoal Australia, an ASX-listed top coal producer with 4,000 employees, faced an expiring head office lease amidst its M&A expansion. Concurrently, Sydney CBD's prime office spaces were dwindling, with large premium spots scarce.
Client need
Weeks before Yancoal’s option for a further lease term expired, it engaged Counsel as its representative to provide a “Stay vs Go” analysis.
Our analysis demonstrated that Yancoal would be able to reduce its footprint by between 15-20% and achieve the optimum financial outcome by moving to a similar or better quality building achieving the additional benefit of providing existing and new employees with a brand new, bespoke fitout. The existing fitout had started to show signs of significant wear.
Our approach
Achieving the targeted financial outcome was highly dependent on careful cost control including real estate costs (eg rent), fitout and other costs. We recommended the appointment of a skilled designer (Hammond Studio) and a highly experienced project manager (Generate Property), who would manage the tender of the construction contract. Based on our experience, the early appointment of a skilled and cohesive project team added significant value during the building selection process.
After further developing the project brief, we used our propriety database of landlords and leasing agents active in the Sydney CBD, to start a competitive market search.
After extensive comparative modelling and engaging in negotiation with various landlords, Counsel recommend a new lease over approximately 1,850 sqm at Darling Park 2, Sydney, all within five weeks of our initial appointment.
Our value
Nine months after our appointment, Yancoal moved into its new office in April 2018. The project team recommended by Counsel achieved an outstanding result by delivering a high-quality bespoke fitout, on time and on budget.
Compared with exercising its option for a further lease term at 363 George Street, our analysis indicated that Yancoal saved in excess of $7.7 million over 10 years.
“From the outset, Emil’s quick grasp of our key drivers saved us substantial executive time as he guided us through two transactions that achieved significant cost benefits and impressive improvements to our Group’s physical environment. We always found his advice professional, accurate and highly practical and we were never in any doubt that he was acting in our best interest.”