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ABB China’s head office relocation: significant savings achieved

01/12/2016

ABB is a global industrial group that focuses on automation and electric power technology. One of the key objectives of ABB’s real estate strategy is to improve space utilization and to reduce facility costs. Thanks to the Optimaze Measure space utilization study tool, this objective was achieved when moving the company’s head office in China.

The lease agreement for ABB’s head office was about to expire. The real estate unit had found that the office space in the current premises was being utilized inefficiently. They had the option to either extend the agreement and reduce the space used or move to completely new premises.

Real estate unit needed hard data on actual space utilization to help decision making

The real estate unit had set its sights on a potential new location for the head office. It was unclear, however, if there would be enough space in the new location for the entire staff. First, the unit wanted to find out more about the actual space utilization of the old head office. The real estate unit had previously used an Excel model for defining the space utilization of their small sales offices. This model was sufficient for the sales offices, but a more efficient system to compile and analyze data was needed for the head office; the real estate unit chose to use Optimaze Measure.

Vice President, Country Real Estate Manager Heikki Karvanen was impressed by Optimaze Measure. At the end of the two-week measurement period, he had a clear report on the head office’s space utilization. The report and the conclusions based on it made it easy for him to explain to the decision-makers why they should move to a new location. There would be plenty of space for the entire staff in the new office. Reducing the number of square metres would save money, even though the rent per unit would increase.

Savings on the head office's real estate costs were indisputable

The proposal to relocate was approved. Karvanen sums up its impact as follows: “The new location is half the size of the old one in terms of square metres. We will also transfer some of our activities, so if we use comparable figures, we can say that we are moving from a facility of 15,000 square metres to a facility of 11,500 square metres. The cost effect is about one million US dollars per year. That is a significant amount. The premises in the new location are modern and easier to make use of.”

The results of the measurement made using the Optimaze Measure tool also gave information on unit-specific space utilization, which facilitated internal communications and change management. “Without Optimaze Measure, justifying such a radical change would have been difficult”, Karvanen praises. The real estate sector intends to utilize the measurement data also in the future when planning suitable facilities for the new head office together with the units.

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