The crisis is forcing many well-established tenants to move to other facilities. Some are trading their spacious offices in the city core and for former SRI buildings in the suburbs. Others, on the contrary, can now afford something that just a year and a half ago they were only dreaming of. But they all have one thing in common: they are moving. And how this happens is the actual story.
To each his own
A company’s business can sort of be determined by the way they are willing to talk about their moving to a new facility. If they aren’t really willing to talk about it, it probably means that things aren’t going too well, management has laid off half of the staff and sees no interest in renting vacant space in a Class A facility. But if a banner on a company’s site indicates “We are Moving”, and they are advertising their move to a new facility, this means that the future tenants can only be congratulated as they have survived the crisis.
While in pre-crisis times a move into a new office was most often a consequence of some business expansion, today things look different. Many prelease agreements from last year have now either been adjusted or simply cancelled. A good example is TNK-BP, which turned down leasing 45,000 sq m in the Western Gates Business Park and clearly indicated that the transaction was cancelled due to 390 employees having been laid off and such large offices were now useless. Video International changed its mind with regard to moving to Riga Land, having leased last summer some 20,000 sq m in order to amalgamate its dispersed departments throughout Moscow. In today’s environment such a major move can certainly seem overly expensive.
As indicated by analysts at CB Richard Ellis, office realty is quite busy. “Companies are taking advantage of the situation and are negotiating new rental rates. It’s not a fact that many companies are moving to smaller offices because of layoffs. If they don’t succeed in lowering their rental rates, they will most likely improve their facilities and move from Class B to a Class A facility. Generally landlords are ready to compromise in order to attract new tenants,” believes Irina Florova, deputy director and chief analyst, CB Richard Ellis.
According to Vitaly Krasnov from the moving company Evropereezd, about 70% of companies-customers that they are presently working with are moving to offices with smaller surfaces. The remaining 30% are improving their facilities.
Phases of a long trip
Professional movers appeared in Russia not too long ago and just as before this industry is plagued with grey schemes. Clients themselves don’t know how to deal with the moving companies, and are afraid of demanding a good service since moving in Russia is traditionally like going through two fires. Even when finalizing a contract with a renowned company, a client is subconsciously prepared for some major problems, that some of the load will be misplaced or delivered elsewhere, vases will be broken and the final bill will be higher than agreed upon.
However, a move can be very well organized and every detail can be foreseen in advance. According to Vitaly Krasnov, all of the unpleasant surprises can be avoided by a well prepared agreement. “It lists all the services, costs, responsibilities, even eventualities of a load surpassing the estimated volume,” says Krasnov. “If somehow the load is larger, an addenda is supplemented to the initial. There won’t be any chances of the foreman requesting more money than agreed upon.”
In order to determine the cost of a move, experts recommend listing all of the items on paper and only then phoning the movers. If the final cost turns out way more expensive than the client expected, perhaps reverting to the services of an appraiser frequently offered by moving companies would make sense. With major moving companies, the first step is generally a visit by a manager that evaluates the load and cost, and explains how the estimates are achieved and discusses the timeframes. If a client is satisfied a contract is signed.
Moving companies aren’t generally bound by week days or working hours. They can move an office over a week-end or during holidays. Timeframes are determined on a case by case requirement, but 30 workplaces can be handled over one working day anyway. An experienced mover is capable of moving a major corporation over a week-end with shifts working non-stop.
Specialists indicate that a contract must have a clause regarding compensation for losses occurred to the property of the company-customer. There are obviously movers that assume full material liability, and all of their services within a move are insured. But they are just a few. Usually movers assume responsibility for those items that they pack themselves but oftentimes the employees of the company-customer want to pack their things on their own. In such cases the mover will provide boxes, packing paper, stickers but will not guarantee that during the moving operations the property won’t be harmed. Professionals pack in such a manner that the weight of the objects is evenly spread throughout the boxes and the load is well compacted.
“The employees of companies moving to a new office only pack small things from their cabinets and drawers, the rest is packed by us,” says Ekaterina Vedeneeva, Deputy Director, Commercial Department, Logistics Service. “If a client wants to pack everything on his own then our level of responsibility is accordingly lower.”
When packing glass items a special bubble wrap and packing paper are used. Furniture is protected by felt blankets, cardboard sheets or shrink film. As indicated by Evropereezd, the most popular packing for personal items and filing folders is a five-ply corrugated box measuring 455×370×400.
Valued objects such as high-tech equipment or antiques should definitely be insured before they are moved. The cost of insurance is relatively reasonable. For instance, Ingostrakh charges an insurance premium of $100 for loads valued at $30,000. In order to get such an insurance policy, the insurer requires a statement from the balance sheet confirming the value of the freight.
A matter of prices
Management that intends on moving without incurring too many costs can be understood, especially when they are doing so in order to save the business in times of crisis and when every dollar counts. Professional moving services cost from 70,000 rubles to move 50 workplaces, and this is the lowest price in Moscow. A renowned company that has moved many transnational corporations, will charge somewhere around 150,000 rubles. So wouldn’t it be easier to ask one’s employees to handle the move and hire a team of affordable movers? “Not really. In moving a large company a huge number of boxes has to be packed. Regular loaders cannot handle such a load,” says Ekaterina Vedeneeva. “With regard to security, professionals move offices everyday and hence the efficiency of their work is very high. One team will be working at one site while another crew at the other. All operations are conducted in parallel: packing, unpacking, loading, unloading, and assemblage at the new location. Such a well-organized work lowers the timeframes for the move.”
While professional movers are interested in a move taking as little time as possible, keep in mind that so-called grey teams are inclined to take their time as they are getting paid by the hour. Their services are like a lottery. You may get lucky and get a team of honest students that will work rapidly and with care. Otherwise you may come across some seasoned movers who will stretch their time with innumerable coffee breaks, take a week to finalize the move and present a bill several times higher than agreed. And you won’t be able to object since there are no signed contracts...
Furthermore, not all small movers have experience in moving large cargos. It has to be understood that 100 workplaces represent some 500 boxes. If a company has archived documentation, lots of in-house accounting, then the amount of packing will be even higher. Unlike grey teams, professionals always have a lot of packing material available. “Let’s assume that a client needs to quickly move about a hundred additional boxes, we will be able to fulfill this job without any hesitation,” explains Ekaterina Venedeeva. Incidentally, many professional movers have designed their own packing material which provides an additional amenity.
With regard to transportation, professional companies are equipped with such trucks as Mercedes-Benz or such vans as the Renault Kangoo. The inside of the moving trucks are covered with material and furnished with belts for tying up the cargo so that sharp turns and road problems won’t harm the cargo. Grey teams normally provide transportation in the form of some cheap old Russian trucks ZIL and semi-trucks Gazelle. It’s however true that they don’t necessarily pack in a slipshod manner, and oftentimes show exceptional thoroughness and try to pack as well as possible, even unloading the whole cargo in order to pack it better — let us not forget that for them time is money.
Usually companies that have moved with professionals once have never regretted it at least. As indicated by Ekaterina Vedeneeva, a lot of the new clients come through recommendations from previous customers. “There are corporate clients that work with us on a regular basis,” says Mrs. Vedeneeva. “Advertising brings us essentially customers interested in moving their personal belongings from one apartment to another.”
Not just a move
An additional argument in favor of professional movers is the fact that their services are constantly expanding. Many major movers offer antirecessionary programs. For instance, Evropereezd recently began offering its customers the possibility of purchasing used furniture and computer equipment. “The demand for such a service is great. Used equipment is being sold at 10-15% of its value when bought new. If a client just needs a couple of computers, we are sometimes able to offer it for free,” says Andrei Akhmatov, Director, Business Development, Evropereezd. “With regard to used furniture, we sell it at 10-20% of its initial cost. It’s usually bought by companies that aren’t capable of buying new furniture or just don’t know how their business will evolve. We also lease used furniture. For instance, a client is awaiting the delivery of some new furniture and will lease something in the interval basically for pennies.”
Many major moving players offer local storage services to their clients. Spare computers and unnecessary furniture can be packed and stored until better times, when business takes off once again and there is a need of new working places for new employees. Temporary storage services can be handy during renovations in a new office. Incidentally, some customers use such a service on a regular basis storing equipment for exhibitions. It’s actually needed some two to three weeks a year, and space for storing exhibition stands in-house is not really viable. It’s cheaper to have them stored at a movers warehouse.
While management has some flexibility when moving furniture, computers and documentation, by hiring various kinds of companies or doing it on their own, whenever it comes to installing telecommunication equipment, professional help is always required. Unless the company specializes in this field.
Today’s office telecommunications are comprised of a telephone station, system equipment, wiring and connectivity and Internet access. Organizing communications in a new office is handled way ahead as it requires time. While offices before the crisis were leased shell&core and new tenants had to turn a vacant surface into a functional facility, communications were handled during this period. But the situation has changed practically overnight. “Firstly, the number of moves since last fall didn’t always make it possible to plan ahead of time the communications in a new office,” notes Mikhail Sergeev, Director, Corporate Communications, Gars Telecom. “Secondly, shell&core offices in times of crisis aren’t in such demand as no one really wants to invest over 500 US dollars and more in office renovation. As a result, the demand for a quick communication fix has grown considerably.”
Communication services, such as telephony and Internet, can cost some $200 at a minimum. This will cover wiring at the office and building, allotment and connection of ports on the telephone station, and setting up the equipment. It can cost even more depending on the class of the facility and specifics of company’s activities. Gars Telecom, last fall, launched a promotion called Moving for Free, and moves client’s telecommunications free of charge. After every such move, Gars Telecom becomes a new telephony and Internet operator for the new surface — and that’s the name of the game. According to Mikhail Sergeev, the value of such a service quickly caught on. There is no competition with the moving companies since they only transport movable property. “Not every telecom company can afford to move a client for free, as a new facility may require new optical channels and appropriate infrastructure inside the building. An operator’s costs can reach tens of thousands of dollars,” explains Mr. Sergeev.
The process of moving telecommunications is always done in two stages. First the equipment is moved, then comes the wiring of the office, mounting and tuning of the telecom outlets. Traditionally, the location of the outlets and configuration of an office’s telecom system depends on the furniture layout. And when the actual office is moved, then comes all the rest that is plugged into the new outlets.
Mikhail Sergeev warns that should this process be disrupted in any manner, the setup of the telecom-system may have to be implemented with people in the rooms. Secondly, there may be a lack of outlets and required infrastructure to service all of the employees. “Accordingly, an office may be left totally or partially deprived of communications for a certain time, which has a rather negative repercussion on business,” says Mr. Sergeev.