The NAB challenge
With a key lease at 500 Bourke Street (47,000sqm) due to expire in 2020 the timing was right for NAB to consider their workplace strategy for their Head Office premises. They occupy space across 7 CBD buildings and fringe locations with commitments ranging from 2017 to 2027 and needed to execute on a lease strategy that could rationalise these holdings and optimise flexibility to market conditions. Following their success in assisting NAB with their Sydney real estate strategy in 2016, Pepper was again engaged to provide NAB with Tenant Representation and Transaction Management services.
The firm’s main objectives:
- Align the property solution with NAB’s workplace accommodation and workforce productivity strategy
- Reduce both fixed and variable costs and direct capital investment
- Deliver a solution that has flexibility to meet the changing landscape of financial services in Australia and the uncertainly around business planning in the mid to long term
The Pepper Property Solution
Pepper undertook an assessment of NAB’s existing portfolio in Melbourne, identifying market risks and opportunities, established timelines to deliver key milestone outcomes and implemented a market engagement strategy to secure a new head office premises. The team undertook an off market process for NAB’s requirement directly engaging with counterparties and leveraging strong relationships to deliver a mutually beneficial outcome. Pepper provided strategic advice, full financial modelling and recommendations to key NAB stakeholders on shortlisted opportunities and managed the negotiation of heads of agreement for commercial terms for the entire 66,000 square metre development at 405 Bourke Street, Melbourne.
- A transaction that extracted maximum value for NAB and met their strategic business requirements
- A transaction that provided the required flexibility to both market and business conditions
- A property solution aligned with NAB’s workplace accommodation and workforce productivity strategy
- Reduction of both fixed and variable costs and direct capital investment
With all objectives met, NAB approved the business case and executed an Agreement to Lease in October 2017.