The Value of the Transpacific Technology Relationship
U.S Technology has been in Australia for almost a century, since 1931 to be precise. Since then, US Tech firms have arrived thick and fast, to the point where today, with almost no exception, every single major US Tech company has a presence in Australia.
Over the years, millions of Australian careers have been made, tens of billions of dollars have been injected into the Australian economy, and our own technology has flourished due to shared learning.
Yet with $146 billion predicted to be spent on technology in Australia in 2025, a 9% increase on 2024, the scale of the opportunity is accelerating, further strengthening the importance of this long-standing TransPacific relationship, and indicating that we have only scratched the surface of that which is yet to come.
Australia's Rise
Australia's stature is rising, transforming from quirky backwater to a global powerhouse, in what feels like the blink of an eye.
As economic, political and social tremors are felt across global regions, Australia is increasingly seen as the safe destination for business expansion, with many international businesses now naming Australia as their Asia-Pacific hub.
For those considering such an expansion, what are some of the facts that might assist their evaluation?
In this infographic, we have offered statistical information that reveals more than mere numbers and percentages, as each one tells a unique story of growth and prosperity.
With over 10 years of experience advising international businesses, if you’re considering a move we'd love to help, so please do get in touch.
Franklin Shanks Assist in a Lease Relocation for A Medical Retailer
The Company:
Global Retail Sleep and Breathing Solutions company.
Our Engagement:
Franklin Shanks was appointed to source a replacement site for the end of the lease term. Along with working closely with the client to provide a suitable fit-out.
FS Project Management were appointed to manage the fit-out of the store. The key benefits in having an independent project manager are;
Liaison with Centre management to ensure policies and procedures were fully understood for the build-out of the space
Approval process both in-house Centre and certifiers for issue of Complying Development Certificate
Design review to ensure all information required for full fit-out requirement
Program management and clear expectations set for tendering shopfitters
Tender process to ensure competitive cost achieved for ResMed
Tender review for minimisation of variations
Weekly site meetings and reporting to key stakeholders within ResMed
Onsite quality control for minimisation of return to site for shopfitters
Occupation Certificate management to ensure the first day of business (FDOB) achieved
Full defects reporting and management
The Challenge:
The old site was in part of the suburb with very little foot traffic and low brand visibility. The sales of their products had been in steep decline for the best part of 2 years as the major shopping centre expansion and renovations attracted trade away from local strip shops. The client’s brief was to source a site close to the major shopping precinct with high visibility, and parking for staff and clients to boost awareness of the brand and sales. Based on internal Data the client wanted to remain in the area as a bigger client base could be captured.
The Outcome:
Whilst the site was being sourced by FS, I recommended testing the market inside the main shopping centre and lifting brand awareness.
A Kiosk contract was negotiated until a suitable site became available. A site within the centre became available with a fit-out that could be worked around. The site was delivered warm shell to the client, significantly saving on full fit-out costs. Also meeting client sustainability criteria.
A Gross lease negotiated from an initial offer of $120,000 down to $100,000 gross per annum
With a fit-out contribution of $80,000 to be applied to the rent across the term of the lease.
FS Project Manager Nick Maric worked closely with the client and centre around fit-out design and tendering the works delivering the fit-out alterations on time to meet the proposed opening date and lease commencement date.
From the client:
“We have seen a significant jump in sales (and conversions to PAP therapy)!
157.3% increase in revenue sales in the 7 months since opening new store and 246% increase in conversion products.”
Now more than ever: We don’t shop to buy
Retailers have long taken advantage of the lure ‘want’ has over ‘need’ and created shopping meccas that inspire, delight, and open wallets. But we now sit at a nexus where our shopping needs can be easily filled online, and retailers need to work harder on desire and dopamine hits to keep us coming back into stores.
Iconic and engaging physical retail is bouncing back.
Even amongst global turmoil and the dreaded R word (that we are apparently not having in Australia), physical retail has rebounded. Amongst the biggest and busiest shopping malls in the world are The Forum Shops at Caesars Las Vegas, which is spread over 162,000 sqm and attracts 40M shoppers annually. Westfield Stratford City in London is slightly larger at 177,000 sqm and attracts 50M visitors; dwarfing them both is The Dubai Mall with 577,000 sqm which attracts 85M visitors.
As for department stores the one and only Harrods, with 90,000 sqm of internal space gets 15M visitors per year, while Galeries Lafayette Paris is 70,000 sqm and welcomes 12M visitors. Shading these two, in attendance at least, is the gorgeous Galleria Vittorio Emanuele II in Milan, which has only 19,000 sqm of space, but attracts a whopping 60M visitors.
The average spend per head isn’t eye-watering; which is worrying for luxury brand bottom lines in 2024, but promising for the return of retail as a whole. It indicates consumers want to spend, they still want that physical endorphin rush, and they still see value in getting off the couch to interact with their favourite brands. In Harrods, the average transaction is US$300, whereas Westfield Stratford City is around $100, and Galleria Vittorio Emanuele II is again higher at $450, but nothing crazy - it is Milan after all.
What do these retail meccas have in common?
First and foremost people go for the experience, the history, the Instagram shot, and the bags that bear the name of the brand experience.
People are there because, in many instances, they are fulfilling a lifelong dream. Think Harrods for a genuine shopping tote, the revamped Tiffany & Co’s The Landmark on 5th Ave or the classic Louis Vuitton on the Champs-Elysees. There is something intoxicating about all that history, romance and storytelling, that goes beyond the bag you take home.
The future of retail will have increasingly clear lines of delineation.
For those who want a commoditised item for everyday life, such as a new laptop charger or a replacement showerhead, it’s more likely that the online giants will get the spend. It’s just too easy and too cost-friendly, and nothing good will come from retailers attempting to out-spend Temu and Amazon on digital ads. But when it comes to high-end fashion, luxury goods, and premium or bespoke products that inspire joy, confirm our sense of self, or are intended to last, the experience centres will continue to win over.
In the vast space between these two paradigms, in billions of metres of suburban retail, the mid-ground offerings will continue to struggle. This is not a new prediction, but the timeline does appear to be speeding up. The majority of retail is not cheap or quick enough to compete with Temu, nor is it enticing enough to warrant the ‘day out shopping’ that was once a major form of entertainment. As our needs are fulfilled online and our expectations of great experiences increase, our wants get harder to impress at a local mall level. These stores can't compete with the history of Harrods, so they need another hook. It must be about the intangibles and the power of genuine human experience that online will struggle to replicate for some time.
The future is friendly
How do retailers solve for all that space in the mid-ground? Many larger retailers with vast store networks are already successfully experimenting with ways to play to a store's strengths: instant gratification, touch and feel, and service-based offerings. Even Officeworks has bought Geeks2U inhouse, with 'Meet a Geek' in store because they recognise the value of solving problems face to face that most of us could probably google. Physical retail spaces will always have the upper hand when it comes to good old-fashioned human-to-human interaction and learning. A friendly, familiar face in a local store drives deeper, longer-lasting loyalty than a tiktok campaign, and anyone who has done their time on customer service phone support will attest: we're all nicer, and happier, face to face. The future of physical retail will hinge on, and benefit from continuing to ramp up the humanity. We don't shop to buy; we shop for entertainment, immersion and fundamental human connection.
What does a tenant advisor actually do?
We all no doubt know the feeling; a boardroom set-up, lots of people who don’t know each other sat around it, and then the meeting convener makes the ultimate faux pas: “Could we please go around the room and get everyone to introduce themselves and briefly explain what they do.”
First up is easy, but if you’re down the line you start to think “What is it that I actually do? I mean, I do lots of things. Oh dear, I’m up next!”
With this anxiety-filling thought in mind, we’d like to explain what a tenant advisor actually does, or should do, so that we don’t get confused with what others should be doing.
1. Space Requirements Analysis: A good advisor interrogates the client wishlist and forms an educated prioritisation matrix. This is the art-of-the-possible.
2. Site Selection: A good advisor buffers the noise and the emotion of so many options. With process and patience they work the matrix and narrow them down, until only the few remain. This is threading the needle.
3. Market Scanning: The client might know what they can predict today, but a good advisor must have knowledge to plan for flexibility tomorrow. By continually assessing emerging trends and sectors their advice is both intuitive and data-validated. This is the all-seeing-eye.
4. Lease Negotiation: A good advisor understands the deal prerequisites for both parties, the levers to pull, and the hot buttons to push, to deliver a win-win outcome. A lease is a long-term relationship which should start on an equal footing. Experienced instinct is paramount. The calm amongst the storm.
5. Lease Review and Analysis: A good advisor effectively translates the minutiae of the current contract, and explains the detailed implications. This is laying the deal foundations.
6. Renegotiation and Restructuring: A good advisor knows what value means today, for all parties. They work the matrix again, creating an environment of competitive tension amongst the shortlisted targets. This is narrowing the expectation gap.
7. Project Management: A good advisor has a good team around them, and they have experts who turn the bricks and mortar building into the complete and finished result. This is curating perfect spaces.
8. Cost Savings: A good advisor is empathetic to the impacts of cost. When their advice saves the client on the unnecessary, so that the necessary can be invested in, that’s true service. This is eeking out incremental wins.
9. Dispute Resolution: A good advisor maintains the goodwill amongst tenant and landlord, even during moments of strain. This is balancing the needs of all.
10. Ongoing Support: A good advisor, is available to the client long after the deal is done. With sage advice or a proactive new idea, value is lived as a continuum. This is paying it forwards.
In, summary a good tenant advisor fully understands his or her client’s ongoing needs and does not just turn up when a lease expiry notification materialises in their calendar.
Paul Smith Engage Franklin Shanks to Negotiate Exit of Stores
The Company:
Paul Smith UK – Retail Luxury Retail clothing, accessories and jewellery
Our Engagement:
Paul Smith engaged FS to negotiate the exit of their stores in Sydney and Melbourne. We assisted Paul Smith in organising the defit of their store in Sydney and negotiated exit for the Melbourne store. For the Melbourne Store the preference was to end tenancy without taking on the make good obligations in a heritage listed building.
Challenges:
Melbourne: 266.90 sqm
Using the standard make good guide provided by the institutional landlord Franklin Shanks arranged for the scope of works and costings around a make good.
The guide included works outside heritage listing guidelines and not reflecting the condition of the property upon entry.
To meet these and heritage-listed property standards the quote came in at $448,268 +gst. (equivalent to approximately 9 months rent)
FS negotiation was based on Estimated Cost of make good was equivalent to 9 months’ rent more than a penalty fee should Paul Smith had terminated the agreement early. Additionally, the timeline for trades and Heritage building approval timelines actual hand back date would be much later than lease end date..
Sydney: 135sqm
Make good had to be complete by end of term date. FS obtained quotes from companies already inducted into Westfield to save time and costs for works commencement.
The Outcome:
Melbourne: Negotiated a settlement offer for make good as a lump sum payment to the landlord of $200,000 + GST and make good obligation of removal personal items and clean and tidy only. The clients full Bank Guarantee of $270,000 was also returned
Sydney: Full make good to cold shell completed ahead of agreed hand back date. With full Bank Guarantee returned.
From the Client:
“Thank you Kate for all your assistance with closing these two shops. It’s always difficult for a company when you are closing shops in a country where you have no administration team based. The complete process has gone very smoothly and efficiently.
It has been a pleasure working with you.”
- Anita- Commercial Property Manage, Paul Smith UK
What can Office do to Drive Talent Aspirations?
An Office Should Function Like an Idyllic Village.
Talent Attraction and Talent Retention is how ‘hiring-well and inspiring-often’ is described these days, and it is a key metric for all discerning businesses. Thankfully, the brief and insidious quiet-quitting movement seems to have abated for now, and a job market of optimism is returning for some sectors, including Technology, Finance, Healthcare and eCommerce, all of which are back in expansion mode.
The question now becomes, “What are the strategies for ensuring that Talent will seek out our organisation and, once onboard, will stay motivated and performing?”
No doubt there are various formulas and algorithms that can enlighten, but I pose the notion that word-of- mouth for attraction and continuous on-the-job-learning for retention remain two of the best strategies. High praise and recommendation from a trusted peer is a compelling endorsement, particularly if that praise is for an employer who provides genuine skills-improvement for career potential.
63% of job leavers cited “no opportunities for career advancement” as a main reason for leaving, according to a Pew Research survey, and while I’m adding a layer, based on my own experiences, lack-of- opportunity tends to be less about promotion and more about furthering oneself through knowledge and skills attained, because ultimately this is what translates to future market opportunity.
Not wishing to denigrate any organisation’s attempts to provide their people with knowledge, but classroom Learning & Development, for me, has never cut the mustard. I believe the best way to learn is through osmosis, trial and error, time-on-task, seeing how the experienced people do it better, until over time the learner does it better than the teacher.
What I have just described is a structural form of osmosis, and there are of course other forms, such as collaborative osmosis, in which peers, grouped together, will over time improve collective knowledge by learning from each others’ innate strengths. We may be good at one thing, while relatively inadequate at another, but within the group there will invariably be a complementary set of efficiencies and deficiencies. Once it is known who is the go-to for each task a form of mutual symbiosis, can occur. This is how a tribe survives and it is only made evident by living and participating in the daily group activities
Kings Cross, London. A development inspiring total urban transformation
The challenges of a dispersed office workforce are entirely new, and you shouldn’t let any know-it-all convince you otherwise, because it first emerged only 2 years ago, and we are learning its impacts for the first time. However, in saying this, intuition and reason have served us well as a species over millennia, and these challenges are entirely surmountable with a dose of both of them.
As Tim Cook correctly opines “innovation isn’t always planned”, in fact I’ll add that its far better when it isn’t. Innovation, spontaneity, creativity are not easily accessible in a formal setting. The duality of this statement is that, as an individual, almost everyone has more expansive creative thought when walking a forest-trail, or submerged in a bustling city market, yet as a group people tend to be far better at articulating their creativities when they are in person, rather than peering into a screen filled with screens.
This village concept is presenting itself more regularly via a number of growing initiatives. Adobe, for example, has seen a skyrocketing of enquiry for formal mentoring, with over 80% of Gen-Z workers requesting a mentor, since the launch of their 2023 mentoring initiative. The presence of an “elder” can be comforting to all of us, as we navigate the trials and tribulations of the working life.
Elsewhere, in commercial property, we are seeing the blossoming of a different kind of village concept, the “town square”. Perhaps the best examples are the station development precincts that are starting to pop up everywhere. This is certainly topical for Sydney, with North Sydney’s new station development, set for an August ’24 completion. Martin Place, Pitt St and others are in the wings, as Australia’s usually warm and sunny climate makes it an ideal location for open-plan projects of scale.
What makes these station developments meaningful is the acknowledgement that people are no longer adequately engaged by a desk and a nearby café, instead they want an inside-outside workday, in which the surrounding precinct is as much of a feature as the office itself.
Some proof of this is in the vacancy stats, with Manhattan having an office vacancy of around 16%, while its East Manhattan development precinct at Hudson Yards has a 7.8% office vacancy. The same is true of the City of London which has an 11%+ office vacancy, while office built around the Kings Cross Station development has a 6.5% vacancy. People and businesses want activation.
Returning back to my original Talent Attraction and Retention theme and applying the simplicities of logic and reason, if we are to counter the erosion of knowledge sharing that hybrid working may indeed promote then the obvious answer is that we must give the workers something to look forward to, be inspired by, and want to be around. What better than:
A bright, comfortable, temperature favourable office, where the sense of something new exists every day, and being surrounded by lively and accessible outdoor spaces, so that your wandering time with colleagues and clients brings out the best in each other.”
By my assessment we are at least on the right track.
Mike Franklin
The New Era of Work 2024
The New Era of Work 2024.
After so much conjecture and opinion, about the changing state of work and workplaces, we decided to amalgamate our own client engagement experiences to provide a modernistic view on the workplace transitions that businesses are now faced with.
We explore:
Leadership, Generational Preferences, Technology’s Take-Over, andthe Broadening Role that both employers and landlords now have for delivering Healthy, High-Performing and, ultimately, Compelling workplaces.
Click below to read
