As Christmas approaches and the commercial property market continues to be sluggish for owners, landlords must come up with innovative ways to attract tenants. Some of them are offering incentives that make them look a bit like Father Christmas offering special incentives to get spaces off the books before the end of the year.
One way to encourage a prospective tenant to make a decision to rent now as opposed to waiting until the New Year is to offer a price break. Better cash flow is a good way to attract a business owner’s interest and it can make the difference between getting a unit rented straight away or having it sit vacant for a few extra months. This strategy will work best for landlords with older buildings or who have paid off investments. They are in a better position to offer incentives to occupiers.
The special rates are usually negotiated on shorter contracts. Landlords are anticipating that market conditions will improve soon, and they want to be able to charge better rates when the lease expires.
Sweetening the deal with increased tenant installation (TI) allowances is another strategy that can help to encourage a prospective tenant to make a decision more quickly. The landlord may choose to offer more than the standard TI to fit out an office to get the space filled. The tenant will no doubt appreciate having an up-to-date look to his or her new office and the business will get off on the right foot in its new location.
Growthpoint Properties Limited is offering a new feature to tenants with its deposit-free lease. The “Undeposit” system means a business owner does not have to pay a large security deposit when signing or renewing a lease for space for an office, factory, warehouse, showroom, or shop. This option is available to the company’s most creditworthy prospective tenants. If approved, they do not have the burden of having to pay three months’ rent up front along with moving costs and other expenses.
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