What should owners and occupiers be focusing on in 2019?
Category Market News
What should owners and occupiers be focusing on in 2019?
It's not an easy time in the commercial property space. Tenants are scaling back and landlords are finding it tough to land larger, longer-term occupants. That doesn't mean it's impossible to find the right space or tenant, but rather that both landlords and tenants need to be flexible and ready to adapt to find the best solutions.
1. Workspaces as experiences
By now, landlords and tenants alike should be well aware that the modern workplace is changing (in fact, if you're calling it 'the modern workplace', you're probably already behind).
Workplaces have undergone dramatic change over the past few years, and old-school offices no longer cut the mustard. Today's workspaces form part of the employee value proposition - emphasis on value. To attract the best talent, employers need to up the ante when it comes to workplace comforts. Employees want spaces that cater to their every need, from the basic (food and Wi-Fi) to the luxurious (coffee bars, gyms, restaurants, chill areas, recreational spaces and more).
Landlords and tenants need to adapt to this revolution: landlords to attract tenants, and tenants to attract top talent. Work isn't just about work anymore; it's a complete lifestyle.
2. Co-working and on-demand workspaces
Landlords, take a look at your existing stock - especially if you're wanting to fill larger spaces. How can you adapt your assets to the preferences of an emerging generation of workers, which values flexibility, freedom and desks on demand?
Co-working facilities and hot-desking give workers the freedom they desire while offering landlords the ability to divvy up larger spaces and fill them with a range of tenants (rather than a single, large tenant that may be hard to come by). And of course, there's the added benefit of not putting all your eggs in one basket. For tenants on a tighter budget, these kinds of setups are ideal, and for landlords, they're a workable solution in a trickier market where a single large lease may be harder to secure.
Co-working looks to be less of a trend than a new benchmark for commercial and retail space. Integrating complementary usages at a single site can offer substantial benefits to both tenants and landlords. Read more about the shift towards co-working and its advantages.
3. The latest technology
Tech is the next tick-box for both tenants and landlords. The Internet of Things (IoT) is transforming everyday objects into smart systems, and companies are rapidly moving towards the kind of technological revolution that some experts say will change the way we do business for generations to come.
Technology is a massive part of the employee value proposition, which means it's critical to occupiers and should be just as important to owners. It's all about ease, convenience, efficiency and safety. From biometrics to big data; augmented reality to artificial intelligence; cloud connectivity to instant intercontinental collaboration, workplaces are pole-vaulting into the future.
There's substantial benefit for owners who invest in the technological revolution. Implementing the right mix of tech increases the value of your asset and strengthens investment capabilities. It's a matter of when, not if - and jumping on the trend sooner rather than later is key to resonating with a younger, more agile generation of workers.
4. Proximity to public transport routes
Soaring fuel costs are driving more and more people towards public transport. Tenants, keep this in mind if you're looking for new premises: better proximity to key public transport routes is not only a drawcard for new employees, but can also help to address the prevailing problem of parking shortages (and costs).
And it's not only fuel costs that are propelling people towards alternate transport options. Many employees are refusing to waste hours of their day in traffic, choosing to work flexitime hours, or travel via bus or train so they can work or relax during their commute. Or, they're simply working from home.
5. A move back to CBDs
A decade or two back, cost and scarcity saw a significant migration of businesses out of the central city to more affordable outlying spaces. However, an oversupply of stock means that leasing prices have evened out, making the CBD a viable prospect once again. Combine this with improved public transport, central city upliftment projects and tax benefits for those investing in CBDs, and you can understand why businesses are returning to the refreshed, rejuvenated, now-trendy city centres of South Africa.
Key take-outs for landlords and tenants
Landlords and investors need to change their thinking if they're to maintain occupancy, and tenants need to think carefully about where and how to set up shop from a financial and practical point of view.
It's tricky in that landlords may well need to spend money to make money in a market where tenants are cutting back, but it's critical to look to the future now.There is long-term value to investing today in elements that will only gain more and more appeal in the future. Lastly, but certainly not least, is the value in cultivating and maintaining successful, long-term tenant-landlord relationships: they're your bird-in-the-hand in the current market.
Last thought: are you getting maximum value out of your property or office space?
Is your property positioned to attract the right tenants? Is it marketable, relevant and appealing to occupants? You could be losing out because of a few small upgrades that could offer big results.
We've recently launched a SMART Property Management Service with a team dedicated to prioritising our clients' assets. After all, the way you manage your asset today will impact its value tomorrow. Our team will audit your property to help ensure that it achieves the best possible returns.
For landlords, we commit to helping reduce vacancies, increasing net rental income and ROI, and advocating legal compliance. For tenants, we strive to find the right vacancies to match all location, budget and configuration requirements. We also conduct pre and post-occupancy property inspections, helping identify any wear-and-tear and acquiring quotations where necessary. If you wish to refurbish, we can project manage the work internally. And of course, our team is able to manage all your property maintenance and upkeep.
Want a property that works for you? Want your asset to work as hard as it can? Get in touch on +27 (21) 422 0778 or via firstname.lastname@example.org. We're in the best possible position to assist you.
Author: Swindon Property