Big Business Turns Its Back On Tower Power
Sydney Morning Herald
Wednesday April 10, 2002
A name in neon lights and harbour views from the upper levels of a landmark building used to be the ultimate corporate status symbol.
But after September 11 the signage market ground to a halt.
Companies simply do not want to advertise their presence in buildings and, in some cases, the name on the building can be a deterrent for other tenants.
Six weeks ago CB Richard Ellis resorted to putting a large billboard on the top of 1 York Street, advertising that the naming rights were available.
The building is at the southern end of the Harbour Bridge, allowing executives caught in the daily traffic snarl to ponder the exposure the position offers.
For $350,000 a year, the naming rights could be yours, although under city rules you would also have to take an office in the building as only big tenants are allowed to have neon signs atop skyscrapers.
``There has been some reticence from tenants to take up signage rights as a result of September 11," said, John Hickey, director of the leasing firm Grosvenor Hickey Tindale.
Warren Gleeson, whose company specialises in signage rights, agreed there had been a slowdown, but did not attribute it directly to the terrorist attacks on the World Trade Centre in New York on September 11.
Instead he saw the slump as part of universal reduction in advertising spending this year.
``Companies have reduced budgets for advertising and they prefer to direct what budgets they have into campaigns for product promotions, where they can see immediate results. Signage is about branding."
Some buildings once regarded as premium addresses were being shunned because the existing tenants were seen as adding to the security risk.
One real estate agent said the presence of the US consulate, Merrill Lynch and Bank America in the MLC Centre was a concern for prospective tenants.
``People get searched in the carpark with those mirrors under their cars. It's not the sort of inconvenience people want."
However, other multinationals have shrugged off any September 11 fears. The accounting firm Ernst & Young has signed as the key tenant in Latitude, the office tower component of the World Square development in the CBD.
Its national director of facilities, Stephen Cox, said the company had taken signage rights as part of the deal.
`` We didn't have any issues with it. We saw it as a good opportunity."
© 2002 Sydney Morning Herald
