Innovative Ways of Attracting and Retaining Good Quality Tenants
TITLE: INNOVATIVE WAYS OF ATTRACTING AND RETAINING GOOD QUALITY TENANTS.
BACKGROUND The evolution of the commercial property market with trends like shorter lease lengths and competition for new tenants in the market for example, means that landlords can no longer rely on traditional ways of attracting and retaining tenants. According to Rasila, H. (2010), “the competitive environment is changing and the real estate owners are seeking new ways of differentiating themselves from competitors”. Traditionally, landlords and landlords’ agents over the years have relied on incentives such as rent-free periods, fitting out and premiums to attract and retain tenants. According to Rasila, H. (2010), “traditionally, the business logic in renting business premises was to build the premises at the right location and then rent the premises to the businesses first in line.” The real estate market it appears has always depended on the initiatives of the landlords and while the real estate market will remain dependant on this initiative, it should be redirected and reinvigorated so that it can remain a viable and attractive industry for investors. One of the reasons for this is that the property industry has several stakeholders and their role in innovation within the industry cannot be underestimated. However, occupiers of commercial premises are looking beyond the right location thereby putting pressure on real estate owners to come up with innovative ways of attracting and retaining tenants. This view is echoed by Niemi, J. and Lindholm, A. (2010), “Since the market is changing from a traditional supplier-driven business towards a demand-driven business, such methods to evaluate the occupiers’ needs and preferences become crucial”. The suppliers of commercial property as a consequence face
the prospect of capital risk in developing a property on the basis of what they believe the users want and the likelihood of the unoccupied spaces if their building decisions are not
BACKGROUND The evolution of the commercial property market with trends like shorter lease lengths and competition for new tenants in the market for example, means that landlords can no longer rely on traditional ways of attracting and retaining tenants. According to Rasila, H. (2010), “the competitive environment is changing and the real estate owners are seeking new ways of differentiating themselves from competitors”. Traditionally, landlords and landlords’ agents over the years have relied on incentives such as rent-free periods, fitting out and premiums to attract and retain tenants. According to Rasila, H. (2010), “traditionally, the business logic in renting business premises was to build the premises at the right location and then rent the premises to the businesses first in line.” The real estate market it appears has always depended on the initiatives of the landlords and while the real estate market will remain dependant on this initiative, it should be redirected and reinvigorated so that it can remain a viable and attractive industry for investors. One of the reasons for this is that the property industry has several stakeholders and their role in innovation within the industry cannot be underestimated. However, occupiers of commercial premises are looking beyond the right location thereby putting pressure on real estate owners to come up with innovative ways of attracting and retaining tenants. This view is echoed by Niemi, J. and Lindholm, A. (2010), “Since the market is changing from a traditional supplier-driven business towards a demand-driven business, such methods to evaluate the occupiers’ needs and preferences become crucial”. The suppliers of commercial property as a consequence face
the prospect of capital risk in developing a property on the basis of what they believe the users want and the likelihood of the unoccupied spaces if their building decisions are not