LANDLORDS: How To Lease an Office Building – What are Tenants Looking for?
During the construction boom of the previous decade developers rushed to complete projects to take advantage of the influx of international investment. It is not fair to say that every office tower built during the boom is inadequate in terms of today’s market requirement, but it is a reality that tenants have a lot more choice when it comes to office space.
Whilst price is, and will always be, a major factor in deciding which office space to lease, tenants also want to know that the building they reside in is well managed and maintained. Your offices may be spacious and well serviced, but if the common areas of the building have been left to dishevel prospective tenants may be reluctant to lease because an untidy lobby or WC reflects poorly on them.
The following are important considerations for landlords of older buildings who hope to attract new tenants or retain existing ones.
Common area refurbishment is an easy way to rejuvenate a building. The use of long tube lights on a ceiling is not an attractive way to illuminate a lobby or corridor. A flickering or broken light would be even worse. Giving common areas a warmer more natural source of light could make a building feel different.
Could the width of your entrance doors be causing a problem for tenants; do people have to queue either side to get in or out? If your building has communal bathrooms, are they immaculately maintained? Are the floor tiles worn? Does the decor looked dated?
Some aspects of a building cannot be changed but a refurbishment of those that can can extend the viability of a building by years.
There is a tendency in the UAE to lease to the highest bidder. This is an obvious financial decision and one which is rarely called into question. But what value does a retail tenant offer if it does not cater to the occupiers of the same building?
A building which has leased retail space to uses which do not complement the building is likely to see tenants leave once or twice a day in favour of a nearby restaurant, for example. This means the financial support offered to a building is being given to an adjacent building simply because the retail space in the first building has been poorly allocated. Additionally, the landlord of the building with the restaurant is likely to have their retail tenants renew based on continued footfall.
Choosing the right type of retail tenant to compliment and office tower is of the utmost importance. Working within Dubai’s saturated market, landlords must appeal at every level to new and existing tenants. Today’s tenants are assessing how buildings affect staff morale and if a building, or a nearby building, does not support a decent standard of F&B, it is likely a tenant will look elsewhere.
No More Shell and Core
Cost is still a major consideration for the majority of tenants. A large but avoidable cost for many tenants is fit out. If a landlord is able to offer a fitted Category A, or fully furnished Category B property, it could be enough to entice a tenant away from a newer build which is offering shell and core space only.
Dubai’s office market is a tenants market. Tenants are able to choose and are looking closely at how staff are able to access their place of work so everything from the condition of the road outside to the speed at which an elevator door opens, is a consideration. Landlords who were once able to claim a central Dubai location as their USP are now facing extreme competition from newly completed Dubai developments. Firms no longer need a Sheikh Zayed Road address; to be in Dubai is enough. Landlords take note.
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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