Landsbankinn decides to build on its plot at Austurhöfn
The Board of Directors of Landsbankinn has decided to construct housing for the Bank's operation at Austurhöfn in Reykjavík. The Bank has examined several options to resolve its housing needs in collaboration with consulting company KPMG and engineering firm Mannvit. The result of KPMG's analysis was that Austurhöfn was the most advantageous option.
The Bank will occupy around 10,000 m2 of the new building, or ca 60% of its square measure, and sell or rent around 6,500 m2 as premises for shops and services. The Bank will mostly utilise the upper floors for its own operation where square metre prices are estimated to be comparable to office housing in other prime locations in the capital region. The most valuable parts of the buildings on the lower floors will for the most part be sold and excess space on upper floors rented out.
Helga Björk Eiríksdóttir, Chairman of the Board of Directors:
"It is gratifying that a solution to the Bank's housing problem is in sight. The Bank's operation in Reykjavík city centre is currently spread over 13 buildings, most of which are leased, and the facilities are uneconomic and impractical. This is one of the steps that must be taken to improve operations and better position Landsbankinn to develop in line with a volatile environment. We will proceed with care in this matter, as the stakes are high. It is important to us to ensure the continued and appropriate preservation of the Bank's building at Austurstræti 11, as it is of cultural and historic importance."
The factors considered by KPMG in the evaluation of possible locations were efficiency, the value of the building for the long term, transport, location, zoning plans, flexibility of the building, and service and activity in the neighbourhood. The diverse nature of the Bank's operations led to the conclusion that it should remain centrally situated in the capital area. Other options taken into consideration were plots in the vicinity of Borgartún, Kringlan and Smáralind. Having regard for all the above-mentioned factors, the conclusion was that Austurhöfn was the most advantageous option.
The relocation to new housing will reduce occupied square metres from 21,000 m2 to around 10,000 m2. This estimation of the Bank's housing needs is for considerably fewer square metres than previously thought necessary. The aim of relocating to a new building is to optimise, increase efficiency and meet demands for changed work processes in financial services. This includes project-oriented work spaces that allow employees to migrate in response to project requirements.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
"Rapid technological developments and sharp changes in the financial market require new work procedures and much closer cooperation and flexibility within the Bank. It is important to work out of suitable office facilities that enable such cooperation in order to continue providing our customers with exemplary service. By selling or renting out around 40% of the building at Austurhöfn, including the most valuable parts, the Bank benefits from owning a prime building site. Landsbankinn will construct an advantageous building which will harmonise with and complement its environment. This decision by the Board of Directors is the first step - now preparatory work can begin for real."
Annual savings from relocating the Bank's operations are estimated at around ISK 500 million; accordingly, the decision about future headquarters was pressing. The estimated cost of constructing a 16,500 m2 building is around ISK 9 billion, including plot costs. Having regard for the fact that the Bank intends to sell and/or rent out 6,500 m2, the Bank's expenses for the part of the building it will use to house own operations will be around ISK 5.5 billion. This cost will be offset by the sales value of vacated housing.