Landlords ‘slow to react’ to the buyer’s market says survey

Posted Wednesday 15th December 2010

‘Tis the season to be jolly’ goes the famous Christmas carol Deck the Halls. But try telling tenants in traditional office space that they should be fully embracing the festive spirit at the moment.

The annual Occupier Satisfaction Survey by Property Industry Alliance & CoreNet Global has recently been published and it seems many landlords have yet to take on any of the advice given by the same report from 2009.

Overall tenant satisfaction in this year’s report is rated at only 4.9 out of a possible 10 – down on last year’s figure of 5.7. Such a disappointing score shows there is still plenty of room for improvement by landlords says Geoff Fallon of commercial agent Vail Williams.

“Many landlords still believe it is a game of ‘us versus the tenant’ which is an approach that is clearly wrong in a market where prospective occupiers are harbouring a lot more negotiating power than in previous years. It seems that some landlords are still unwilling to work in partnership with their clients”

Tenants questioned in the survey highlighted three crucial areas that they believe many of their landlords are failing in:

Service Charge – many occupiers believe the charge is being used as a source of income and not to fund the service provision to the building they occupy. A score of 4.2 reflects the mood on the subject.
Environmental Issues – with tenants looking to improve their own in-house environmental performance to meet ever changing statutory requirements, many are frustrated that landlords aren’t recognising the link between their building’s sustainability credentials and its capital performance. This area of concern was ranked with a score of 3.5 – the lowest in the survey.
Communication – rated with a score of only 4.7, tenants said they often felt in the dark about news on prospective lease renewals and the like and believe landlords need to have a better understanding of their tenants needs.
Some landlords do seem to be changing with the times however with many questioned seeing a greater willingness to be more flexible and offer improved terms when negotiating a new lease. A score of 5.8 for this area is higher than any other in the survey.

“Landlords need to consider tenants as customers and understand that customers have a choice. Those offering a better and more flexible customer orientated service will be successful in the longer term” comments Geoff.

It’s just a shame that it has taken the biggest economic crisis in a generation to highlight the fact.

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