Since the global challenge relating to Covid-19, the real estate sector has seen a significant allocation of intellectual resources, dedicated to papers, studies and debates, articulating around opinions on inherent topics such as ‘how will institutional offices be utilised’ and ‘the profile of demand for such space’.
What is evident, rapidly maturing ESG associated expectations, significant attention to staff wellbeing and openly taking into account ‘the voice’ of the new generation of talent, has (and continues to accordingly evolve and do so) created a context where “quality, quality, quality” comfortably sits alongside the traditional parameter of “location, location, location”.
Engel & Völkers Commercial Milan has committed to the dimension and distinction of Tenant Representation specific professionals. This investment has rapidly been recognised with the awarding of various exclusive mandates for the search of strategic and Corporate identity solutions. This successful addition to the Milan based business, is seeing first hand the ‘definition and breakdown’ of “quality” whilst supporting clients in their evaluation and decision making process.
An interpretation of quality, in essence, could be classified as subjective, in terms of recent and ongoing space requirements though, consistent attention has been / is being paid by clients to the following 5 elements when shortlisting and subsequently looking to select a property:
- Corporate policy, standards and identity provide a ‘natural gravitation’ towards highly certified and quantifiably sustainable buildings
- Efficient and safe links and access to public transport
- Innovative and varied property specific and surrounding area amenities and services
- Enable to convey company culture, image and personality on a long term basis
- ‘Purchasing’ space at a ‘fair price’
This latter factor continues to stimulate discussions relating to gross and net space and how commercial areas have been derived, to ultimately which a rent (on a sqm / per annum format) would be applied. A respective interpretation of ‘commercial’ areas is a matter which clients are meticulously analysing, especially under ‘a shadow’ of budget and costs that companies generally maintain to adhere to.
The city of Milan in recent years has seen the delivery of some globally renowned projects and landmark buildings, in conjunction to other numerous ‘modern facing’ tenant focused opportunities. This introduction of both brand new and extensively refurbished occupational availability has stimulated an appetite to either relocate to or newly establish via such solutions. This combination of effervescent levels of demand combining with ‘mutually agreeable’ visions of “quality” has meant that rental prices, especially in more central locations, are not some of the cheapest in Europe. Yet though, taking into account the ‘alternative’ business related considerations that Corporates tend to ‘cross check’ with, in our experience, the base asking rent (within a respective potential tenant’s budget range) of a property is not in its self a ‘component of resistance’, what can be deemed ‘more relevant’ is the ultimate agreement upon the area size (calculation) to which a respective rent would be applied to. It is prudent to comment that this is ‘a conversation’ which requires both compromise and an understanding of such cultural differences between organisations originating (Headquartered) from different countries, or even regions, we are proud to be part of this process.