Landlords play Father Christmas

While it might not quite be a bonanza, some owners are looking just a little bit like Father Christmas.

With the continued sluggishness in the commercial property market landlords and property owners are more frequently thinking out of the box by coming up with unique ways to attract tenants.

While it might not quite be a bonanza, some owners are looking just a little bit like Father Christmas.

They might not be coming down the chimney, but they are certainly scattering some festive season gifts by trying to end off the year with not too many vacancies on their books.

The first obvious way to combat the sluggish market is to drop the rental rate for cash strapped tenants looking for relief on their cash flow.

"Landlords with older buildings - or paid off investments - are better placed to offer reduced rentals," commented Org Geldenhuys, managing director of Abacus DIVISIONS.

"These are usually done for shorter contract periods in order to negotiate better rates on a renewal basis going two years into the future. Some landlords are taking the view that things will improve and then one would be able to get better rates," says Geldenhuys.

Landlords are also luring tenants by offering increased tenant installation (TI) allowances.  This is where landlords would give more than the normal TI to fit out an office in order to attract tenants.

This is a nice option for tenants who are comfortable with paying market-related rentals, but will get more from their landlords in terms of TI.

This way the tenant’s office will look upmarket and radiate a feeling of success and accomplishment – which is good for business. 

Growthpoint Properties Limited is breaking new ground for commercial real estate globally by introducing an innovative new deposit-free lease. The ‘Undeposit’ system by Growthpoint means businesses no longer face the burden of large security deposits when renewing or signing new leases for offices, shops, showrooms, warehouses and factories.

Like commercial property security deposit models worldwide, in South Africa the traditional deposit for commercial property equals hefty three months’ rental for premises and its associated space, like parking.

Norbert Sasse, CEO of Growthpoint Properties Limited says the new ‘Undeposit’ is tailor-made for Growthpoint based on the excellent creditworthiness of its clients, its use of deposits over the past decade and its rentals.

These are just some of the tactics being employed by the more ingenious landlords.

HO HO HO!