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If you would like a copy of the survey then please click here and download one. Here are some key points which in aggregate show that occupiers face some serious property traps:

• Almost ten times as many tenants believe the application consent process has got worse than those who think it has improved
• Four times as many tenants believe landlords’ service charge and insurance arrangements have got worse than those that think they have improved
• The worst score of 3.5 out of 10 is for landlords’ interaction on environmental issues
• The process for negotiating dilapidations scores just 4.6
• 30% of tenants hear from their landlord less than once a year

As a result, occupiers generally remain dissatisfied with their landlord’s performance.  The scores across all the KPI’s are all lower than 6 out of 10 and the majority had less than 5 out of 10 on the weighted average, demonstrating that the majority of occupiers are dissatisfied with the relationship with their landlord.  The table below shows the spread of scores.

 

*Weighted score on basis of 1= extremely dissatisfied, 10 = extremely satisfied.   
Totals may not add up to 100% due to rounding.
 

Areas of friction: We have highlighted the rent review process, the landlords’ service charge arrangements and the application for consent since these relationships in particular have shown a marked deterioration. 

These are traditionally areas of friction between the landlord and the occupier.  When economic conditions get tougher, the division between them is exacerbated, particularly in these areas.  Landlords use the letter of the law to leverage opportunity in every area including the service charge, to help them keep their building in tip-top condition.  You can’t blame them.

The Survey highlights a distinction between large and small occupiers.  Large organisations which have a Property Director and/or a top level Facilities Manager who truly understands property, tend to have less frictional relationships than smaller occupiers.  Why?  Because they know how the marketplace works, they know their legal rights and the pressure points.  They talk the same language as the landlord and also tend to work for organisations which have clout, plus, they know how to leverage it.

The smaller enterprises: (<250 heads so, still significant organisations), tend not to have a professional leading their property issues.  The result?  The smaller occupier is getting a tougher deal.  They have no concerted voice, no real understanding of how the property market works and even less clout, so the likelihood of confrontation is increased.

What do the experts think?  Haywards is undoubtedly biased, since we primarily focus on the interests of occupiers.  Whilst property is not often a main board topic – until it goes wrong or when a major change is necessary - we do believe a far more pro-active stance should be taken by occupiers.  To wait for the landlord to contact you first, not to participate in debate, to ignore or dismiss property issues only exacerbates lack lustre performance from the property industry.

Does Haywards blame the property industry?  Somewhat.  There is no doubt that the leaders in the property market are making a real effort to be more customer-focused, but they could do more in terms of occupier education.  Companies like Segro, British Land, Land Securities to name but a few, and numerous small landlords are making a big effort to improve their service. 

The industry’s real problem is that their customers (i.e. the occupiers) often won’t engage until they need something.  And, of course, the real friction arises when that need is urgent or is in conflict with the interests of the landlord.  So, it is wholly understandable if you want to vary your lease, or need to get the landlord to buy-in to your CSR programme, that the reaction might not be quite as you would like especially if you haven’t already prepared the ground through meaningful dialogue.

Property strategy?  As we know from Haywards’ own research, less than 20% of companies have a defined property strategy, with fewer than 10% having a workplace plan of action.  Worse still, even those who have a plan seldom abide by it with rigour.