Savings of almost R4 million have been made by Mutual & Federal Insurance Company Ltd through a sub-let of a Windhoek building left empty after the company’s acquisition of FGI Namibia.

The sub-lease was negotiated by Corporate Real Estate Services (CRES), a division of Old Mutual Properties, to whom Mutual & Federal have fully outsourced their property strategy and administration on a retainer basis.

Viv Delbridge, account director for CRES, said the deal on the Windhoek building meant Mutual & Federal had saved more than R8 million on lease cancellations and sub-letting of surplus space since the FGI Namibia and CGU Insurance Company acquisitions.

The Windhoek building was one example of the duplication of offices resulting in significant surplus space arising from the acquisitions. The merged company now operates from the Mutual & Federal building in the city. The sub-let on the entire surplus office space is for three years of the remaining five year head lease.

Delbridge says Mutual & Federal have been able to reduce their offices from 55 to 39 after contracting CRES to assist with a national property rationalisation exercise.

This contract has extended to an outsourced service that includes payment of rentals to landlords, renewal negotiations, locational analysis, space planning and benchmarking to help Mutual & Federal optimise their property strategy.

An in-house software system provides concise information to guide Mutual & Federal on their property decisions in locations throughout South Africa and neighbouring countries, which is set to deliver a further R1 million in savings during 2003, says Delbridge.

Ends

ISSUED FOR: Old Mutual Properties

BY:                    Michael Kerkhoff & Associates

INQUIRIES:      Viv Delbridge 021-530 4518

                          Michael Schirnig 021-530 4561

                          Michael Kerkhoff 021-424 5280