GL Hearn recently joined forces with North West Business Insider to capture the attitude of occupiers in the region towards their landlord. Here, Stephen Downey
from GL Hearn’s Manchester office looks at the results for each question asked and offers advice to landlords as to how they can learn from this vital intelligence.
Q1: How would you rate the standard of property management being undertaken by your landlord at your current premises? Do you feel the landlord provides good value for money for the service charge paid?
“If we take these 2 questions together as the responses are inter-connected and reveal quite a lot about the relationship between landlord and tenant.
“We hear a lot about landlords’ changing attitudes towards their tenants, with it no longer being seen as a ‘them and us’ situation. In fact, some landlords no longer refer to their tenants as ‘tenants’, but now refer to them as ‘customers’.
“Particularly in these difficult times, the landlord wants to stay close to the tenant/customer in an effort to keep them happy which will hopefully result in them remaining in the space for the long term, as losing a tenant results in a void which has become increasingly difficult to fill.
“The response from the survey suggests that approximately 75% of occupiers are happy with the standard of property management but there is almost a quarter who think that the standard is either bad or very bad with only 50% feeling that they get good value for money from their landlord.
“If this was a customer satisfaction survey, I would suggest that there is room for improvement and perhaps take it as a warning sign to landlords that all may not be well in relation to the quality of property management and value for money on service charges.”
Q2: Given the right opportunity would you relocate from your current premises to occupy space which better suits your business?
“Over 50% of respondents said that they would relocate, which suggests that their current space is not right for their business needs. The reasons for not moving could be many and varied, however, given the right set of circumstances it is encouraging to see that there is potential pent up demand from occupiers to relocate.
“This bodes well for the market when we start to see an up-turn, however, it is also an early warning sign for landlords to ensure that they do not lose the tenant through a re-location.”
Q3: At your current business premises, what concerns you?
“For the next few questions we can compare and contrast results between 2012 and the 2011 survey. In both years the main concern for occupiers continues to be the potential cost of re-locating, which almost 50% consider to be prohibitive. This seems to send out the message that landlords with available space should try to unlock this potential, with subsidies to facilitate relocation as a possible option. However, this is not always possible as there are other costs and issues that come into play with re-location.
“Other main concerns include the location of the business, i.e. city centre versus out of town, which has increased from 21% to 40%. The only thing that can be concluded from this is to say that occupiers are increasingly concerned that their current location does not serve their business requirements. It comes back to the point that if circumstances were correct then the survey indicates that c. 50% would more than likely re-locate.
“Car parking issues remain a concern, with this increasing from 35.7% in 2011 to 40.5% in 2012. For as long as I can remember, car parking has always been an issue for occupiers. Unfortunately, I cannot see this getting any better as environmental issues and government legislation do not favour private transport.”
Q4: What other business concerns are you currently confronting?
“It is probably not a surprise to many of us that the main concern confronting occupiers is still the stagnant economy they operate within and resulting business confidence, with cash flow problems up from 45% to 58%. This highlights to North West occupiers that we are not out of the woods yet. Next year, it would be great to report an improvement on these numbers.”
Q5: If you are struggling with making your rental payments should your landlord be sympathetic and work with you in the short term?
“Once again this comes back to landlord and tenant relationships. If landlords truly want to treat their tenants as ‘customers’ then they need to be sympathetic to the financial pressures some tenants experience. I think occupiers want to hear that landlords will work with them during difficult times in the hope that everyone will see the benefits of this partnership arrangement when the economy improves.”