Shane Quinn’s Quintessential Equity took a building in Adelaide from 3 stars NABERS energy to 4.5 stars, minimum, and one in Brisbane from 0 NABERS energy to 5 stars. Strong engagement with the tenants was key to both projects.
When 431 King William Street in Adelaide was built in about the late 1980s, it was one of the biggest buildings in the city, “quite a landmark” according to Noah Warren, general manager asset management of its new owner, Quintessential Equity.
Over time, though, it missed out on refurbishment; “it got no love”.
It didn’t so much become decrepit, Warren says, but it fell into need of an upgrade especially from a mechanical and aesthetic standpoint.
“In so many ways this building was no different to the state of most buildings that draw the attention of QE when we go in.
“They haven’t had the money spent on them and they’re in need of some capex [capital expenditure] to improve them and, most important, the base building and the mechanical systems.”
The things that provide good comfort levels to the existing and prospective tenants.
When Quintessential Equity, founded by Shane Quinn and Harry Rosenberg, bought the 15-storey building in December 2018 from interests associated with property billionaire Con Makris on a 10.5 per cent yield.
In early 2019 it embarked on an $8 million refurbishment with sustainability and tenant wellbeing at the centre of intended outcomes. The goal was to take the building from a 3 star NABERS energy to 4.5 NABERS energy rating, but with hopes to significantly outperform that when the first set of numbers come in after a full year of operation.
The building is in South Terrace, across from a major park, so part of the plan was to encourage exercising in the park by providing good facilities.
On day one of the strategy, the plan was to engage fully with the 28 tenants that occupy the building, Warren says.
“We met with every tenant in the building, unless they were not available and said, ‘this is who we are. Tell us about your history, why you’re in this building, what you like about it and what you don’t like’.
“We understand it’s the first time we’ve met, and you probably think we’re giving you empty promises here, but please tell me.”
Right up front, this builds a relationship with the tenant. “Our business is centred around the tenants. They need to be comfortable; it’s their building. They live and breathe it. We’re based in Melbourne.”
“We don’t see it as rocket science. It’s 101 communications.
“If we don’t have tenants, we don’t have a business.
So the team set to work sharing ideas from aesthetics to mechanical consulting and then creating “meaningful plans” to minimise disruptions for instance with installation of new lobbies and bathrooms, but not to the point where tenants drive the agenda entirely.
“It’s more a case of keeping them informed and being transparent,” Warren says. And turning complex mechanical work into simple language.
The items of most concern for the tenants were the airconditioning, lifts, cleaning and car parking.
The car parking?
“You’d be amazed – people are very protective of their car parks.”
The chillers and boilers were in urgent need, dating back to the late 80s and clearly running on “band aid” fixes.
“The chillers in particular probably didn’t have another summer left in them. And Adelaide gets very hot in summer.
“We needed to work quickly.” This meant getting road permits to bring in the kit and a lot of “crane lifts”.
For the engineering side of the work the company chose Lucid Consulting Australia.
The company came highly recommended, but it was probably Lucid’s ability to demonstrate a collaborative approach that won the day, Warren says.
“I’m not an engineer, but what I really want is to engage with the work and to work with people who can explain things to us and bring us along on the journey.”
Harry Williams, an associate with Lucid who led the work, says the project needed skilled handling, especially in the swapping of redundant old kit for the new. With the plant room on top of the building, the big challenge was negotiating multiple crane movements and street closures.
All up, there were three cooling towers, two water cooled chillers and boilers for the heating – plus the associated plant to deal with…Read the rest of this story in our FLick the Switch ebook.
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