Understanding the needs of tenants is often the most difficult aspect of being a landlord. Fortunately our experience with tenants and landlords enables us to place the right tenant with the right landlord. Generally speaking however, there are some regular requests made by tenants which all landlords can work toward fulfilling.
Often due to issues with tenants current offices and enduring many issues, the most important consideration for most tenants is the management of the building. Tenants will often ask who owns the building and enquire about their reputation. Tenants want to be assured that elevators are always working, that trash is disposed of correctly, that bathrooms and other common areas are maintained.
Tenants understand that well maintained office space is paramount to employee performance. If the air conditioning regularly malfunctions the temperature will affect productivity. If it takes too long to wait for an elevator, that wait will affect productivity. A well maintained and managed building, even an older one, will attract tenants.
Access and Location
One aspect of leasing office space that a landlord cannot change or influence is access and location. Tenants want staff to be able to arrive and start work in the most comfortable manner possible. Tenants are increasingly looking for properties with good road access and parking, proximity to metro stations, and for an area with a prevalence of taxis.
Tenants are also particular about how a building functions. Floor plate efficiency, i.e. how walls and supports have been created to maximise usable space, is a high priority for many tenants as this element of an office cannot be changed. In recent years, Dubai’s commercial tenants have also made themselves more aware in relation to elevator manufacturers and power supplies; whether air conditioning units are split between multiple zones and how exactly temperature and water is controlled.
This increase in knowledge is likely due to tenants realising that current market conditions put them in the power position. There is an oversupply of Grade A offices and no shortage of new builds coming online. Landlords who chose to install the most cost effective products may struggle in today’s climate.
Price and Handover Condition
Price will always be a major factor when leasing office space in Dubai but how price is measured is not as simple as looking at the price per square foot.
All of the properties we manage or have for lease are available on aggregator sites (such as Realla for example). Each property has a price and this will be how many tenants start their search. But a search by price will not indicate how a property is due to be handed over. A shell and core unit in a newer building could be priced the same as a fully furnished Category B unit in an older building. Due the manner in which the search has been conducted, it may the case that the perfect plug and play office was just one price band above.
Landlords can capitalise on the search for convenience by fitting out properties and offering them as Category A or B (A being fitted with partitions, flooring, and roofing; B being fully furnished). A landlord who is able to purchase fit out materials in bulk and offer tenants a plug and play option is likely to be able to recoup those costs in rent paid over time and minimise the vacancy with no rent being received and incurring service charge costs.
Author: Toby Hall
Toby is part of JLL’s MENA Agency team and is Head of Office Leasing in for the UAE. He is a Member of the Royal Institution of Chartered Surveyors and is a registered broker in Dubai with The Real Estate Regulatory Agency (RERA). Toby has over twelve years of experience in Office Leasing focusing on Landlord Representation in Central London, Hanoi, Vietnam and in the UAE