Driving Successful Property Disposals
1 February 2012
Is your business’s financial performance being hindered by your exposure to surplus property? Here we set out 8 key points which we consider to be essential when you are developing a disposal strategy in any market, let alone this one. Whilst concentrating here on the disposal of surplus leasehold office accommodation, many of the principles apply in the other market sectors.
1.Understand Your Market
The real estate market, as within any other specialist market, is full of nuances, market imperfections, hearsay evidence and analysts that manage to tell you what has already happened. When disposing of space it is important to understand how your space compares with the competition. Knowing all the relevant markets terms, quality and incentives plus knowing how to differentiate your space from the pack is essential.
Occupiers need to be clear about the amount of the space they really need to dispose of at the outset. Intelligent workplace strategies will enable you to reduce radically the amount of space required. Similarly working with an experienced supply chain consultancy team can transform your business’s utilisation of space and generate significant cost savings and improvements in efficiency.
When your analysis is done, think hard about any adjustments you need to make to ensure your accommodation is presented to the market in a way that will maximise your returns.
The ROI is key. Far too many real estate projects are done without detailed financial consideration. It is crucial that the property team understands all the budgetary implications and that a robust financial marketing programme spanning many months, sometimes years is developed.
With the amount of space on the market, yours must stand out. It must be perfectly presented. After all, would you advertise your old car for sale without a decent valet, polish and general tidy up?
A sales pack of information should be prepared at the outset. Key information, clean visuals, informative plans and most importantly, a summary of occupational costs and maintenance performance is a good start point. Prospective lessees will feel much more confident if they are presented with all the relevant data at the outset.
6.Choosing the Right Agent
This is a difficult one. A good agent who truly knows his market is worth his weight in gold. By contrast, the opposite is true. Doing deals in today’s market is a combination of determination, personality, trust and an understanding of who is the real customer. The current market is clearly showing a performance gap between agents who just act as brokers and those who place themselves in your shoes and treat your property as if it were their own to maximise your return.
7.The Intelligent Client
The “intelligent client” is that unique bridge between the Board and the market place. The intelligent client knows who to appoint, knows how to manage them and should certainly know enough to challenge the various contributors to the overall process whilst commanding the respect of the Board. Everyday there are difficult decisions to be made so having someone who is experienced in this role is essential, especially if you have many disposals.
Too often the relationship between the landlord and tenant is “stretched”. Admittedly many landlords have not woken up to the fact that occupiers are paying customers, but both parties need each other. However, don’t be naive and don’t assume that just because your lease says one thing you can’t do something else. Play your cards wisely and don’t give away value.
Driving successful disposal programmes is an art. Get it right and the savings can be enormous.
Example - 10,000 sqft of surplus space in the Thames Valley could easily be costing your company £360,000 pa or £1,000 per day. Just think what your business would have to turn-over to pay for this?
To discuss your surplus accommodation or any other real estate aspect, please call Nick Cook on 01494 540 000 or email email@example.com
NAI Haywards is a leading commercial property and workplace advisor representing the needs of occupiers throughout the UK and across Europe. We deliver our clients sustained business profitability and flexibility by increasing the contribution made by their property and workplace environments”.
If you would like to know more please do not hesitate to call Nick Cook on 020 7101 020
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