8 Aug 2014
Understanding occupier requirements is the key to advising international investors
Investors aiming to create sustained capital value need to know what occupiers want and match their buildings to it.
It is difficult to own investment properties in different countries. Not just the challenges of day to day management or the often invisible nuances of local market conditions, but perhaps most important of all being able to get hold of the right advice from the outset. That may be the difference between a good investment decision or a bad one. Investing overseas is certainly more difficult and more risky than owning property in one’s own country. The ability of a consultant to influence a client with the right advice that might challenge their traditional way of thinking could well be the key part of mitigating risk.
The most valuable advice our landlord clients need is often found beyond the more prosaic issues of bricks and mortar, pipes and wires.
These are important and need to be reflected properly in any decision, but to really help landlords make their investments perform, sharing the knowledge we have about how occupiers actually use buildings is essential. This knowledge lies at the heart of creating sustained value in the long term. It forms the basis of any strategic decisions about purchase, development, refurbishment or asset management.
Assuming all occupiers from the same sector, in the same region or even in the same city want identical space is a mistake. Occupier requirements differ between sectors but equally frequently between businesses of different sizes in the same sector, and of course by geography. The traditional rules of thumb are changing; the legal profession is increasingly willing to occupy in open plan. Magic Circle and US firms still tend to adopt high density cellular offices but medium sized firms are scrutinising occupational costs and there is a move towards higher density use of space, agile working and nearshoring (read our Law in London report). The tech companies prefer open plan floor plates but are less comfortable with standard BCO (British Council for Offices) style suspended ceilings and fan coil air conditioning; the changing needs are far less stereotypical. However it is true that each occupier type has trends, each trend places different demands on the base build specification and will, for occupiers determine the attractiveness of one building over another.
It takes consultants that are properly integrated with brokers to develop a full appreciation of what occupiers want from their buildings.
The knowledge of occupier requirements developed from our occupier facing technical project management and building surveying teams working in collaboration with the commercial tenant advisory teams, means that invaluable occupier requirements can be passed on to give a strategic advantage to investors.
This knowledge will determine the specification of any refurbishment and help shape the brief for a new development. Getting this right will serve not only to reduce void periods but also to reduce waste and lower fit-out costs, making assets perform better.
An client of ours once said “the most important cheque I pay is the leasing fee”, it’s taken a long time to fully understand why but he was right and it is our challenge to help get that cheque paid quicker!