It’s time for landlords to think as business owners
Steve Coulson, the chief executive and co-founder of Kitt, an office management platform that partners with landlords
While working from home remains the norm for many, businesses across the UK are in flux when it comes to their office space. Some are moving to longer term remote working, while others are using this as a hiatus to reset and re-evaluate the needs of their business and staff.
With a tenant deficit, landlords need to be proactive in marketing their spaces. For too long, office space has been viewed as a commodity, but in order to ‘win’ tenants, it’s imperative that now, more than ever before, landlords view themselves not as an asset owner selling space but rather as a business owner selling a product.
The positive news in all this is that businesses are tentatively returning to the marketplace, with big players including Netflix signing a lease for a new office in the capital. Smaller businesses are also thinking ahead, with many looking to return to the office in early 2021.
However, while this is good news, landlords must not be complacent in how they promote their property.
Offices worth leaving home for
Things aren’t going to snap back to normal. So, in order to stand out from the crowd, we need to see a shift away from the traditional approach of office leasing towards a customer centric, space delivered as-a-service model.
With employees having experienced the benefits of working from home, companies that value collaborative work will ultimately be looking for spaces that are worth leaving home for as a way of enticing teams back.
When it comes to the space itself, suddenly functionality has become just as important as aspirational design with employee safety and wellbeing taking precedence. Office design is also in a period of evolution, as the lines between the home and the office continue to blur.
We’re seeing an increase in requests for lets with outside spaces, bike racks and private entrances, as well as technology such as contactless access, and first floor space is at a premium as offices look to avoid shared lift spaces.
Before the pandemic, the main focus was on the communal areas, but this has now shifted towards self contained spaces, with requests for self containment jumping up by 175 percent in October following the second lockdown announcement.
Given the uncertainty of the business sector, tenants are looking to secure one to three year arrangements to get through the short term while they focus on rebuilding their business, with solid Coronavirus clauses in their contracts. At the moment, a five or 10 year lease is a risk that not many companies are willing to take.
The mentality of ‘winning’ a tenant
Few businesses will survive without a constant strive to ‘win’ new customers. So this is the mindset that must be adopted across the industry.
It is very easy to become indifferent in promoting assets, but in an increasingly competitive market, space must be considered as standalone businesses trying to steal market share, rather than remaining passive.
There are some small but effective changes landlords can make to remain competitive:
1) Ensure you make the tenant’s shortlist by offering the right amenities
To maximise your chance of attracting tenants, reframe your building with a new product and story. Think about the type of business you are marketing it towards, and the current challenges they might face specifically. Can you help them overcome these obstacles or offer a flexible term length?
With data showing that tenants are now looking for a different ‘types’ of space, it is also worth investing some time in upgrading your core amenities, such as the commons area, reception and technology, to give yourself that extra edge.
2) Tap into the history and character of your building
When reframing your building, make sure you are also valuing everything about the space – from it’s history to amenities, every little counts when looking to separate yourself from the competition. It’s also worth considering things that may have been unappealing, such as a less central location, which now demand a premium.
3) Deliver a tailored experience
Trying to guess how a tenant wants their space configured at a time like this is nearly impossible, so avoid speculative fitting where you can – there will always be specific preferences, requests or processes that only they are aware of. As such, consider showing the space as a ‘blank canvas’, and work with the tenant to create an ideal space that fits their needs while ensuring the core build is reusable.
The overriding demand right now is on quality, so landlords should shift focus away from quantity to invest time in the real value of their space, and take a bespoke approach to marketing it.
By understanding the needs of the demand-side, allowing tenants input into the delivery of the end space and being flexible on terms, you stand a better chance of ensuring your space gets the right attention.