For further information on Corporate Solutions, please contact: Tony Wyllie Head of Integrated Portfolio Services Corporate Solutions Phone: 02 9220 8729 Email: tony.wyllie@ap.jll.com Chris Hunt Managing Director Integrated Facilities Management, Australasia Corporate Solutions Phone: 02 9220 8389 Email: chris.hunt@ap.jll.com Kevin Hastings Head of Project & Development Services Corporate Solutions Phone: 02 9220 8655 Email: kevin.hastings@ap.jll.com Our office locations: Adelaide Brisbane Canberra Glen Waverley Mascot Melbourne North Sydney Parramatta Perth Sydney www.joneslanglasalle.com.au Any Thoughts? Disclaimer COPYRIGHT Jones Lang LaSalle IP, INC. 2013 This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication. JSL0127 We are interested in hearing your feedback on this edition of The Wrap. Are there any other topics you would like to see covered? Would you prefer to receive this in a hard copy or via email? Are there any colleagues who would like to receive a copy? Please email your comments to thewrap@ap.jll.com
Latest in Corporate Real Estate News 5th Edition - August 2013 Inside this issue MarketActivity The latest on real estate market trends Profile CSC Corporate Solutions News In the last 12 months all Australian capital city office markets have moved in favour of tenants. This is a good news/bad news story for tenants as, whilst there are great deals to be had, it is primarily as a result of subdued tenant demand due to cost cutting, headcount reductions and nervousness in the outlook over the next two year period. Despite the continued challenging operating environment, the current real estate market conditions present an opportunity for corporate occupiers to ease the pain. Resource sector tail off has been a key influence in Perth and Brisbane, with the latter market also affected by significant government sector job cuts. The delivery of close to 200,000sqm of new stock in Brisbane in 2016 will further dampen the market. In Sydney, negative sentiment led by the financial and legal sectors have resulted in the increasingly strong sense that below replacement cost rental deals will continue from now until at least after delivery of the next wave of new projects in late 2015. Melbourne has tended to avoid the peaks and troughs of rentals in other states but a large volume of sublease space and some new building completions are again fuelling negativity and increasing concern for landlords. Clever solutions are being sought by tenants to deal with their current real estate strategy and give them appropriate flexibility in future. The opportunity for tenants is that landlords are prepared to write deals on space much further ahead of lease expiry than is typical, along with underwriting a tenant s existing lease tail. In many cases, this is creating a compelling case for a premises rethink, restructure or relocation. Steve Urwin Head of Tenant Representation, Australia 02 9236 8030 steve.urwin@ap.jll.com Table 1: Projected Market Conditions 2013 2014 2015 2016 Sydney Melbourne Brisbane Perth Adelaide Canberra Source Jones Lang LaSalle A movement in the tenant s favour A balanced market A movement in the landlord s favour
MarketActivity Sydney 2013 has seen a continuation of the cost cutting and downsizing that we saw organisations take in 2012. With the higher representation of international firms, as well as banking and financial services organisations, the impact on the Sydney CBD has been amplified compared to other capital city markets. Vacancy levels have moved above 10%, recorded at 10.2% for Q2-13 in the CBD and 10.7% in the CBD Fringe. Dissecting the CBD numbers reveals A-grade space has the highest vacancy for the quarter at 12%, followed by B-grade at 10.6% and premium space at 9.4%. There is significant sub-lease space available in the Sydney CBD market, currently at 85,000 sqm and this is the fourth quarter of negative net absorption. In Sydney s CBD office market, incentives offered to tenants are close to the highest they ve been for 15 years at a general level of 25% to 30%, but significantly higher in some instances. Whilst incentive levels encourage movements in the market place, tenants need to justify any relocation and what we are seeing is a preference to re-structure and re-gear their leases to take advantage of the current market conditions. With a mindset of cost consciousness and a willingness of landlords to restructure leases in return for secure income, there is opportunity to bring down the overall cost of real estate. Landlords are risk averse and willing to do a forward deal at a more competitive rental structure to minimise their vacancy exposure, improve their WALE (weighted average lease expiry) profile and ultimately improve their building s capital valuation. Those international organisations with their headquarters domiciled in the US or Europe are most acutely feeling the effects of continued economic uncertainty. These firms are looking for short-term leases and more flexibility around risk options and break clauses. The market conditions are not conducive for filling sub-lease space, so the level of recovery is well below passing rent. We are seeing the return of the accidental landlord where tenants with excess space due to downsizing find themselves acting as landlords. Many tenants, finding it challenging to get their sublease space away, are re-gearing their lease(s) and handing back the surplus space to the landlord in return for committing to the building on a longer term. The question on everyone s lips is when will the market turn in favour of the landlords? And should companies leverage the current market conditions or hope to get a better deal if conditions deteriorate further in the Sydney CBD? One school of thought is that further market deterioration has already been priced into deals on offer today. With incentive levels of 30% available in a number of buildings, this may be the tipping point for landlords. Whilst all indications point to a flat next couple of years, the Sydney commercial property market has been known to turn quite quickly and perhaps tenants should take advantage of the benign market conditions. The current market conditions are being driven by weak business sentiment, delayed decision making and record low interest rates. If sentiment changes and these factors resolve, with the record-low supply pipeline, the market may in fact recover more quickly than anticipated. In reality it can be dangerous to categorise the market in a broad basis - landlords willingness to negotiate will differ building by building within their portfolio. 2013 has certainly seen the market move further into the tenant s favour but it is not to the same extreme we faced in the 1990s with 20% plus office vacancy levels driving incentives as high as 50% of the lease term. In summary, conditions have got incrementally worse, not substantially worse, and tenants may be advised to make the most of opportunities presented to them whilst the landlords are willing to bank future income. Gavin Martin Head of Tenant Representation, NSW 02 9220 8458 gavin.martin@ap.jll.com Sydney vacancy Q2 2013-10.2% Sydney Prime gross effective rents - $621.10
MarketActivity Melbourne Melbourne has seen a rather rapid rise in its vacancy rate over the past 12 months. This is due to a negative net absorption environment as a result of below trend demand as well as the introduction of new supply such as 171 Collins Street, 555 Lonsdale Street and 180 Lonsdale Street. The vacancy rate across all grades is now in excess of 10% in Melbourne s CBD but is more pronounced in secondary space. Premium vacancy stands at 9.8% and A-grade at 8.5% as at Q2-13. Tenants in Melbourne continue to focus on cost cutting measures to leverage their real estate portfolio harder. Interestingly, whilst Sydney was an early adopter of activity based working (ABW) this was not the case for Melbourne. However, in the past six months we have seen an increasing number of requirements from major tenants for ABW style environments in addition to the major banks. These include PwC with a requirement for around 13,000 17,000 sqm, KPMG circa 23,000 sqm and Ernst & Young at around 15-17,000 sqm. The amount of sub-lease space available in the CBD at approximately 100,000sqm is also having an impact on the market. It is becoming more and more challenging to dispose of. Organisations with short-term sub-lease space may have to consider riding out the current conditions or settling for a heavily discounted rental. Whereas previously the sub-lease space on offer has only been smaller, disjointed tenancies, now there is contiguous sub-lease space available in quality buildings. Evidence of this includes Places Victoria offering their impressive warehouse conversion in Docklands of approximately 5,900 sqm with a near new open plan fit-out on a term up to nine years and NAB offering five whole floors at 500 Bourke Street. Anecdotally, there is significant hidden vacancy across many tenancies with many firms carrying excess capacity within their footprint. This excess capacity will need to be taken up ahead of any increase in out of cycle demand. Tenants that are coming to the market now for a mid to late 2015 expiry have had the good fortune to hit a sweet spot. Not only are the market conditions weighted in favour of the tenant, there is good quality supply coming onto the market following recent precommitments. For example 20,000 sqm is available at 567 Collins St which is under construction following the pre-commitment of Corrs and Leighton. Blue chip corporate covenants are in demand by landlords offering premium space in five to six Star Greenstar rated buildings. Incentive levels may attract these corporates to buildings that they would not have normally be prepared to consider. These newer buildings provide access to more efficient well designed floor plates of 1,800 to 2,000sqm with side or offset core configurations that suit ABW style fit-outs. Cash is king and landlords are willing to negotiate and offer more flexibility. Previously landlords in older A and B Grade space with existing fit-outs would only be prepared to lease space on a fiveyear plus term, whereas now they will consider three, two or in some instances even 12 month leases. We are also seeing an adjustment of face rentals with deals being signed where face rentals remain fixed for the first two years of the lease and then show a 3 to 3.5% uplift over subsequent years. Incentive levels over 30% in Melbourne s CBD are encouraging some tenants to upgrade their space and others to reconsider a CBD location after residing in the suburban markets due to the attractive pricing. Suncorp took advantage of the premium space available to consolidate from various CBD and St Kilda Road sites into 530 Collins Street by the second half of 2013. We are seeing some tenants bring forward their decision making around lease expires in 2015/2016 to take advantage of not only the attractive market conditions to reduce their overall real estate costs, but also the choice of quality stock available. There are certainly signs that tenants will continue to have the upper hand for the next 12 months however conditions could turn quickly if demand and business confidence improves in 2014 and continued consolidation from the suburban markets helps absorb availability in the CBD. Older stock offering traditional central core floor plates under 1,000 sqm will struggle to attract and maintain tenants in excess of 2,000 sqm. Developers are turning their attention to the next wave of lease expires in late 2016 2018 and what will attract tenants to new developments. We believe tenants wishing to achieve more for their organisations will demand locations easily accessible for staff and clients for all modes of transport (especially public transport and bike), buildings designed to meet densities of 1 person per 8 sqm, include very best practice in all aspects of building design and sustainability, floor plates close to 2,000 sqm, access to atriums and inter floor connections, with well-designed outdoor spaces, staff amenity and access flooring to provide for fit-out flexibility. Peter Walsh Head of Tenant Representation, VIC 03 9672 6560 peter.walsh@ap.jll.com MELBOURNE vacancy Q2 2013-10% MELBOURNE Prime gross effective rents - $399.06
MarketActivity Brisbane The Brisbane CBD market has seen a marked shift over the past 12 months. The heat came out of the resource industry faster than anyone expected and sentiment took a downward spiral very quickly. Having enjoyed an average vacancy rate of around 5.5% over the past decade, the city s average vacancy currently sits at 14.2% which is the highest in 20 years. No sector of the market is immune with prime vacancy levels at 9.9% compared to 2.6% just 18 months ago. We are however seeing the emergence of a twotiered market with vacancy in B-grade stock ballooning to 17.8% as at June 2013. The resource sector is rapidly moving from the peak investment phase to the more steady production phase. This has taken much of the wind out of the sails of demand for office space in Queensland. Due to high costs and low coal prices new mining projects are slowing or being cancelled. As a result, a number of major resource firms and engineering firms are shedding headcount and office space. With the other major occupier of space, the State Government also cutting jobs and embarking on a fiscal repair strategy, there is no front-runner emerging to fill the gap left by the resources sector. Sub-lease space is currently running at 2.6% of the market, which is the highest on record. Off-loading sub-lease space in the Brisbane CBD is becoming a cost recovery exercise, with organisations having to heavily discount the asking rent. A number of large occupiers with lease expiries from 2015 2018 are putting briefs to the market looking to take advantage of the current market conditions. Incentives are currently at 25-30% in prime grade stock and can reach as high as 40% in secondary buildings. Analysis of the historical correlation between incentives and vacancies in the prime sector of the market suggests incentives should continue to rise given the current vacancy. This suggests there is more pain to be felt by landlords and it may take several more months before they meet the market. New supply in the Brisbane CBD has the potential to have a big impact. There is currently 190,000 sqm under construction in the CBD with only 50% of it pre-committed and the majority of the space due to hit the market in 2016. A question mark hangs over 180 Ann Street, being developed by a wealthy Japanese private investor and what impact it will have on the market will it lead the market down by a desire to fill the building or will the owners hold off and be prepared to wait for a desired rental level? 480 Queen Street remains actively and aggressively in the market seeking to fill as much of the building as possible before completion. With a drive for cost efficiency amongst corporates, we see a shift to better utilisation of space and shrinkage of footprint. Until the cost base of the resource companies re-sets itself to the current market conditions and commodity prices, they are unlikely to be a driver of demand in the Brisbane CBD market. Activity based working (ABW) is a concept that is gaining traction in Brisbane, following other firms in markets like Sydney and with improved densities, the requirement for expansion space over the length of the lease will disappear. There will be a flight to quality, with corporates wanting to leverage their space harder and drive utilisation. The average age of stock in Brisbane is 26 years and there is some doubt as to whether the older-style secondary grade buildings will be able to cope as easily with the requirements of ABW. Obsolescence is a real issue with total redevelopment, significant refurbishment or adaptive use to residential, hotels or student housing potentially the only option for some landlords. Michael Greene Head of Tenant Representation, QLD 07 3231 1355 michael.greene@ap.jll.com BRISBANE vacancy Q2 2013-14.2% BRISBANE Prime gross effective rents - $486.08
Perth Over the past few years the focus by mining and engineering companies in Perth has been on how to accommodate business growth in a severely supply-constrained office market as the resource sector went from strength to strength. Even a year ago tenants were scrambling for space in the Perth CBD. But with a combination of reduced commodity prices, more limited finance options and labour productivity challenges, as well as new government taxes and subdued infrastructure spending some resource projects have become uncompetitive, such that they have been shelved. Subsequent redundancies in the past 12 months have realigned WA companies with their eastern state counterparts, who have been cutting costs and searching for new ways to create value from real estate assets since the global financial crisis in 2009. There has been a paradigm shift in the Perth real estate market due to these economic conditions. In the past three quarters around 90,000 sqm of sub-lease space has flowed into the CBD market. Total vacancy for the CBD stands at 7.9% as at Q3-13 compared to the sub 5% experienced for most of the last two years. Negative net absorption was recorded for Q2-13, the fourth quarter in a row. The sheer volume of sub-lease space in the market has meant organisations seeking to dispose of legacy sublease space are having to drop passing rents (or obligated head lease rents) by $150 - $200 per sqm just to get it off their books. There are good quality sub-leases available across a number of A-grade buildings, meaning there is an opportunity for tenants who are considering their options to upgrade their office space at more competitive rents than the direct lease market. In the direct lease market, landlords are having to readjust the terms offered to tenants. Whilst not having to meet the discounting of rents in the sub-lease market, they are having to improve the terms of their deals to adjust to the significant shift in market dynamics. The Perth CBD has a significant number of buildings more than 20 years old, some of which are not able to keep pace with modern workplace occupancy requirements. The market will see some new buildings available in 2014/2015 which will provide tenants the opportunity to consider their options and increase space densities and utilisation rates. As such, tenants may have the opportunity to look for alternative space or to trade up rather than renewing, which was possibly the only option they had when the market was full. A stay vs go analysis is a totally different prospect now compared to two years ago where staying put was the most likely scenario. In our recent experience across four significant transactions (30,000sqm of pre-commitment in the last 12mths) tenants have capitalised on this opportunity and exited older buildings which were not able to support the densities required to create occupancy cost savings. There are still a number of significant resource and resourcerelated projects underpinning the Western Australian economy, across a diverse range of sectors, including some larger ones in LNG (Gorgon, Wheatstone, Canarvon Offshore Basin) and iron ore. However, whilst these companies have had headcount growth meaning more office space (sqm), they have shifted towards increasing densities and workplace efficiency, as well as implementing robust exit strategies over their tenancies. Tenants with an expiry from 2013 to 2016 would be well advised to consider the range of options available to them which simply have not been there for the past four years. Having a robust view on future headcount growth, building in flexibility into the lease and driving densities down is paramount to be able to deliver bottom line savings from real estate portfolios. Andrew Campbell Head of Tenant Representation, WA 08 9483 8478 andrew.campbell@ap.jll.com PERTH vacancy Q2 2013-7.9% PERTH Prime gross effective rents - $794.53
MarketActivity Canberra The Canberra market continues to record double digit vacancy levels, with overall vacancy increasing by 0.7 percentage points to 11.6% in Q2-13. Vacancy in Civic and Barton both increased marginally this quarter, to 9.8% and 12.6% respectively. The highest vacancy in Canberra continued to be in the East at 28.9%, where large vacancies remained around the airport area due to limited leasing activity at both Brindabella Business Park and Majura Park. Net absorption in Canberra this quarter was negative 15,500 sqm, with the majority of this amount being the result of two buildings that were withdrawn from stock due to redevelopment and refurbishment. Two developments reached practical completion in Q2-13, adding 18,300 sqm of new supply to stock. The first of these is the Benjamin Red building at 5 Chan Street, Belconnen (5,400 sqm) which was completed in May, and is the new headquarters of the Australian Communications and Media Authority, who have pre-committed to the entire building. The second is a five-storey office building at 28 Sydney Avenue, Forrest (12,905 sqm), completed in early June of which PwC has pre-committed to 5,177 sqm. This new supply will only add to the pressure facing landlords of weak demand and too much stock. Both prime and secondary face rents declined over the quarter. Declining face rents, along with rising incentives, placed further downward pressure on effective rents. Prime gross effective rents in Canberra decreased for a second consecutive quarter to average $329 per sqm p.a. in Q2-13. Average incentives troughed at five months rent free (based on a 10-year lease) during 2008 and have risen to 17 months rent free in Q2-13. Competitive tension between landlords will ensure the market is tenant favourable for quite some time. Rents are likely to remain flat or decline slightly over the next 12 months. Canberra can expect a supply addition of 69,100 sqm to its office stock in 2013, and a further 67,000 sqm in 2014. Unless there is a marked pick up in the economy which stimulates demand in Canberra in the post-election period, the market will continue to move in favour of the tenants, creating more leverage. Any government cabinet and portfolio restructurings following the election on 7th September may not have an immediate effect on the leasing market. These likely post-election restructurings are expected to influence net absorption and vacancy figures in Canberra well into 2014 and possibly 2015. Gavin Martin Head of Tenant Representation, NSW & ACT 02 9220 8458 gavin.martin@ap.jll.com CANBERRA vacancy Q2 2013-11.6% CANBERRA Prime gross effective rents - $332.82
Client Profile - CSC CSC is a global powerhouse in business and technology transformation. As one of the world s only independent IT services providers, CSC with 87,000 professionals is a trusted partner to approximately 2,500 public and private-sector organisations worldwide. With a track record in Australia spanning 40 years, CSC s 3,000 staff advise clients on a range of business solutions including business & technology consulting, application services, business intelligence & analytics, cloud computing, cyber security, data centres, systems integration, outsourcing, as well as mobile and enterprise solutions. Stephen Brown General Manager Real Estate & Facilities Australia & New Zealand CSC How is your real estate strategy supporting the business imperatives of CSC? Like many organisations globally we are going through a major transformation around our operating model and services. Globally we launched a significant cost-take program in 2011/12 to align our cost base. This program has some key areas of focus including organisation structure, overhead costs in supply chain and real estate portfolio and facilities operations. Given real estate is typically one of the major cost items in any organisation, we have a big role to play globally and absolutely have a seat at the table. We have been able to show a material cost reduction over the past two years in Australia from our real estate portfolio including a number of consolidations. On the flip side, there are a number of incubator businesses that CSC is developing that will emerge as new areas of service. Here real estate has a role to play as an enabler of these businesses. Essentially we need to be agile and be linked into the C-suite as the organisation goes through a significant change program. Tell us about your partnership with Jones Lang LaSalle. We have a global relationship with Jones Lang LaSalle that has been in place since 2006. In Australia, Jones Lang LaSalle provides us with portfolio strategy and management, helping me develop our accommodation strategy, manage our leases and negotiate our transactions. Over the past five years, the team at Jones Lang LaSalle has negotiated leases in Canberra, Brisbane, Sydney, Melbourne and Perth. We have a very strong working relationship and I view it as a real partnership. Jones Lang LaSalle has a seat at the top table with us and really helps us guide and drive our corporate real estate strategy. A recent example was we were looking to an upcoming lease event to align our accommodation requirements and cost base and implement our agile working strategy. Our recent Macquarie Park transaction in Sydney is a great example of how Jones Lang LaSalle added value to our business, by proactively positioning CSC with the landlord well before lease expiry. This enabled Jones Lang LaSalle to bring an off-market opportunity which allowed us to reduce our footprint, minimise the make-good cost of our surplus space and improve our exit strategy. We were able to leverage the integrated service offering of Jones Lang LaSalle with their leasing team introducing the tenant for the surplus space, the Tenant Representation team negotiating our new lease and Project & Development Services managing the exit and re-fit of our re-structured space. In summary we were able to demonstrate significant efficiency and cost reduction gains over the period of the next five years.
How do you maintain a proactive approach rather than just reactive in the CRE role? I get the advantage of Jones Lang LaSalle s market knowledge to understand where the opportunities lie for my portfolio. Along with the Jones Lang LaSalle global team and my headquarters in the US, I constantly review and analyse the portfolio and build business cases to create efficiencies that contribute to the global cost-take out program. We are identifying advantageous circumstances and leveraging the opportunity of when our leases expire to enable a more flexible and cost efficient approach to our real estate. Jones Lang LaSalle is helping us look opportunistically to take advantage of market conditions. I can then proactively take them to the C-suite as a way in which we can positively impact the bottom line. We have an unwavering focus on managing data and always having an up-to-date view across the portfolio. We use this data to inform decision making and undertake scenario analysis. It allows us to be proactive in our decision making, be it to create cost efficiencies, justify capital investment or implement new ways of working. We have very detailed utilisation data that spans back more than three years that has helped shaped our real estate strategy. I need to make sure we aren t just providing a real estate solution, but we are providing a business solution that supports the strategic direction of the organisation. In CRE we need to be sure we are talking the language of the boardroom and be on the front foot with the business. It is imperative to invest the time to develop your business analysis and rationale up front and speeds up internal decision making. What do you see the key influences on your CRE strategy in the next two years? I think cost will continue to play a role in driving our strategy over the next two years. Post- GFC we find ourselves in a new operating environment where lower overhead cost bases are now business as usual for many organisations. But as well as just looking at cost, we need to consider how real estate is adding value to the organisation. Our people are our most important asset and we will continue to deliver workplaces that support our people in delivering the best outcomes for our clients. I see real estate as having an impact on the culture of CSC and with our agile workplace strategy that we are implementing globally, we have a tangible way of fostering collaboration and engagement in the workplace. Equally I see real estate having a role in positioning the CSC brand with our clients in the external market by having our workspace embody our brand values. Part of this is also using our own real estate footprint to showcase some of our technology solutions and products. We, like many organisations, are looking for ways to improve the productivity of our people and our overall business. We have a number of metrics that we monitor and measure for the utility of accommodation and alignment of costs and revenue. We synthesise our CRE performance into these key metrics to demonstrate compliance in any real estate business case that we put to the executive. In this way we support performance driven decision making.
Corporate Solutions News Global Corporate Real Estate Survey Having been through some of the most challenging economic times in recent history, we believe corporate real estate (CRE) is at the crossroads. In a post-gfc environment, cost efficiency is here to stay and is viewed as business as usual. But today, the C-suite is asking CRE to shift the focus from cost to value creation, with CRE having to deliver on both sides of the cost vs value equation. Jones Lang LaSalle has recently released its second global corporate real estate survey Corporate Real Estate at the Crossroads: Cost vs Value. The survey includes responses from 636 global CREs, 61 based here in Australia, and identifies four key strategies to deliver both cost savings and value creation. To find out more visit www.joneslanglasalle.com.au/creinsights Integrated Facilities Management Qantas has recently extended our facilities management contract to include the Australian Air Express portfolio. This portfolio spans 40,200 sqm across 30 sites, some of which are in regional locations. Jones Lang LaSalle was able to secure the appointment given the high level of service and value that the team have delivered to Qantas over the past nine months. Project & Development Services Our Project & Development Services recently performed a managing contractor role for AllianceBernstein for the re-fit of their tenancy in Rialto Tower, Melbourne. We completed the project within a tight time-frame of three months and applied and interpreted the firm s international design, technology and security guidelines to achieve compliance with the relevant Australian authorities and regulations. Our Project & Development Services team undertook the construction management of Capital Group s new Sydney office in 56 Pitt St. This is Capital Group s first owned office in Australia which was established due to the company s strong growth in the Asia Pacific region. We implemented a state-of-the-art telepresence room for Capital Group as well as a series of offices and meeting rooms with high acoustics to support the confidential nature of the work undertaken by staff. Tenant Representation Our Tenant Representation team recently negotiated a 5,500 sqm lease for global pharmaceutical group, MSD at Talavera Corporate Centre in Macquarie Park, Sydney. In an example of how options for office space are becoming more creative, Jones Lang LaSalle identified an opportunity for MSD to utilise surplus space from another tenant at Talavera Corporate Centre that was moving to activity based working (ABW). MSD has also implemented an ABW environment, which provides a refreshed work space that will allow MSD to differentiate from other pharmaceutical companies in Macquarie Park, in order to attract the brightest employees in the industry. Our Tenant Representation team has also been appointed by Allens in Brisbane for a 5,000 sqm requirement which we have taken to market. In addition, Brisbane law firm, McCullough Robertson have also instructed the firm in relation to their 6,500 sqm brief.