New Zealand’s 365 call centres have 12,000 seats, which Jones Lang LaSalle expects to increase by 12% over the next year.
“Evidence suggests that business costs/seat in New Zealand are approximately 48% lower than in the US, 26% lower than in the UK,” the international consultancy’s executive vice-president of strategic consulting, Thomas Kirschbraun, told the Property Institute’s conference.
He said New Zealand offered numerous attractions for call centre investment, including an educated & flexible workforce, attractive base salary costs, sophisticated telecommunications environment, ready availability of languages common to the Asia-Pacific region, competitive cost of property and time zone advantages.
Mr Kirschbraun argued that New Zealand had the potential to become 1 of the preferred locations for offshoring in the new global economy.
Emergence of the internet & e-commerce effectively made New Zealand’s remote location a non-issue. “New Zealand has the potential to reach Ireland’s dizzy heights as a preferred location for investment, offering largely the same attractions as Ireland.”
Since 1994, an average 70 new foreign companies/year had moved to Dublin, helping to boost gdp growth by 8%/year.
Changing business models will transform property sectotr
Mr Kirschbraun said changing business models in the new economy would transform the way real estate is owned, leased & managed. “For corporates there will be a greater alignment between real estate strategies & overall business objectives. As corporations outsource non-core functions such as human resources, finance & information technology, aspects of their real estate portfolio will become redundant.
“Historically corporations have accumulated lumpy assets such as real estate on their balance sheet, but in the new economy, knowledge is the valued commodity. Intellectual capital is highly mobile and knowledge-based companies must locate where â€˜knowledge workers’ want to live and work.
“This means central locations, a clustering of recreational facilities, it can mean non-traditional settings such as converted factory loft buildings.”
Availability of broadband connections was absolutely critical in participating in the global economy. “Some cities have concluded that ubiquitous broadband is as important an economic development tool as roads, electricity & other utilities. As such they have been funding construction of fibre-optic networks within their jurisdictions as a means of gaining competitive advantage.
Planning horizon cut
“The internet is leading to shorter & shorter product life cycles and the planning horizon of the modern corporation has diminished, which is in conflict with the contractual terms of institutional property owners. Business planning is done on a 2-year horizon, compared to typical leases of 5-10 years. Owners need to become more flexible in providing short-term leases.
“At the same time, corporates are beginning to recognise that paying a premium rent in exchange for the added flexibility is a worthwhile trade off.”
Mr Kirschbraun said businesses were better able to predict demand in the new economy, changing requirements for warehousing. “Warehousing & distribution facilities will increasingly focus on horizontal movement rather than vertical stacking as customers demand greater degrees of customisation.”