Office Space

Revenue or Costs?

Landlords have a heady mix of cost line items to consider as we approach critical environmental targets in the form of MEES, enhanced service expectation from tenants and increasing debt costs. Combined with faltering tenant demand in some markets and a downward trend in rental values, the issues are obvious and the solutions few and far between.

As an asset manager with decades of experience across sectors, we take an unconstrained approach to finding value in our assets. With judicious capex in the right places, we look to drive cashflow focussing closely on averting void cost exposure. We review planning options to take advantage of, for example, permitted development rights. Asset repositioning during a recession, for those with deep enough pockets, can be the most economical time to reduce income, whilst the market is subdued anyway.

Rebasing the valuation can open up previously unjustifiable options. Whilst providing competitively serviced office space brings with it management cost, with the right partners on board, revenues can be enhanced when the market recovers. Alternative income streams, change of use, advertising, EV chargers, temporary users. All options should be considered to keep the top line as full as possible.

Sometimes though, simple, good quality asset management is the most important ingredient.

We speak to our tenants regularly, we stay close to them, and we spot leasing opportunities, regears, lease extensions, space swaps. For every tenant needing to downsize, there is usually another one hoping to expand. It happens regularly, and being in touch with occupiers has to be job number one!

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